Source:  Rita Jane Gabbett, MEATINGPLACE, 6/27/11

USDA’s quarterly Hogs and Pigs report on Friday showed sows kept for breeding at 5.8 million head, up just 0.3 percent from a year ago, an indication to analysts that only a few hog producers are starting to increase production.

That percentage increase translates to 15,000 more breeding animals than on March 1, according to the CME Group’s Daily Livestock Report’s analysis of the report.

However, more producers might decide to expand, given recent declines in futures prices for feed ingredients like corn and the fact that many producers have empty sow units since herd reductions in 2008 and 2009, the DLR analysts wrote. If producers see evidence there will be a reasonable corn crop this year that might also induce them to expand.      

“Anecdotal evidence suggest that there are a number of savvy producers who have managed the risk of the past three years very well, thus leaving them with strong balance sheets capable of handling an expansion,” according to the DLR. “Add to those, Cargill’s repopulation of the former Smithfield sites in the Texas Panhandle and our contacts suggest that we could see 30,000 to 50,000 more sows by next year and as many as 80,000 more by 2013,” the DLR predicted.

USDA reported United States inventory of all hogs and pigs on June 1, 2011 was 65.0 million head, up. Up 1 percent from June 1, 2010, and up 2 percent from March 1, 2011. Market hog inventory, at 59.2 million head, was up 1 percent from last year and up 2 percent from last quarter.

The March-May 2011 pig crop, at 28.9 million head, was up slightly from 2010 but down 1 percent from 2009. Sows farrowing during this period totaled 2.88 million head, down 2 percent from 2010 and down 5 percent from 2009.

The average pigs saved per litter were a record high 10.03 for the March-May 2011 period, compared to 9.81 last year.

United States hog producers intend to have 2.87 million sows farrow during the June-August 2011 quarter, down 3 percent from the actual farrowings during the same period in 2010, and down 3 percent from 2009.
Intended farrowings for September-November 2011, at 2.85 million sows, are down 1 percent from 2010 and down 2 percent from 2009.

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