Source:  Tom Johnston, MEATINGPLACE.COM, 6/29/09

USDA's quarterly Hogs and Pigs report released Friday afternoon generally came in line with consensus expectations, although some analysts noted the information was collected June 1, before the hog markets collapsed.

Total inventory of U.S. hogs and pigs as of June 1 was 66.1 million head, down 2 percent from the year-earlier number but up 1 percent from March 1, 2009.

The breeding herd dipped 3 percent to 5.97 million head. Market inventory, at 60.1 million head, was 2 percent lower than last year but up 1 percent from the previous quarter.

At 28.5 million head, the March-May pig crop was down a bit from 2008 but up 2 percent from 2007. Sows farrowing in the quarter totaled 2.97 million head, down 3 percent from 2008 but up 2 percent from 2007. The sows farrowed during the quarter accounted for 50 percent of the breeding herd.

The average pigs saved per litter hit a record high, 9.61, for the March-May 2009 period, compared with 9.38 last year. Pigs saved per litter by size of operation ranged from 7.40 for operations with 1 to 99 hogs and pigs to 9.70 for operations with more than 5,000 hogs and pigs.

Intentions

Hog producers intend to have 2.97 million sows farrow during the June-August 2009 quarter, down 3 percent from actual farrowings in the same period in 2008 and down 5 percent from 2007. Intended farrowings for September-November 2009 are 2.96 million sows, down 2 percent from 2008 and 7 percent from 2007.

"We believe that if the surveys were conducted today, farrow intention numbers would be lower, so we encourage investors not to place too much weight on this quarter's report," J.P. Morgan analyst Ken Goldman wrote in a note to investors.

Livestock analysts Steve Meyer and Len Steiner said the kept-for-breeding number (down 2.7 percent) and the March-May pigs saved per litter (up 2.5 percent) were "worrisome" because they indicate U.S. producers, at least as of June 1, hadn't made a significant reduction in the size of the breeding herd.

"While producers were already dealing with higher feed costs and the shock of H1N1 influenza prior to June 1, there was still some hope that both would be somewhat temporary," they said in their Daily Livestock Report. "Those feelings waned seriously after June 1 when the cash hog market continued to eschew any semblance of a rally and CME Lean Hogs futures declined by $3 to $7 (per hundredweight) over a 10-day period."

Meyer and Steiner added that sow slaughter, meanwhile, increased from just less than 60,000 head per week before Memorial Day to almost 65,000 head the week of June 13.

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