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Quarterly hogs report points to higher prices
Story Date: 10/2/2012
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Source: Lisa M. Keefe, MEATINGPLACE, 10/1/12
United States inventory of all hogs and pigs on Sept. 1 was 67.5 million head. This was up slightly from Sept. 1, 2011, and up 3 percent from June 1, 2012.
Breeding inventory, at 5.79 million head, was down slightly from last year, and down 1 percent from the previous quarter. Market hog inventory, at 61.7 million head, was up slightly from last year, and up 3 percent from last quarter.
The June-August 2012 pig crop, at 29.3 million head, was down slightly from 2011. Sows farrowing during this period totaled 2.89 million head, down 1 percent from 2011. The sows farrowed during this quarter represented 49 percent of the breeding herd.
The average pigs saved per litter was a record high 10.13 for the June-August period, compared to 10.03 last year. Pigs saved per litter by size of operation ranged from 7.60 for operations with 1-99 hogs and pigs to 10.20 for operations with more than 5,000 hogs and pigs.
United States hog producers intend to have 2.85 million sows farrow during the September-November 2012 quarter, down 3 percent from the actual farrowings during the same period in 2011, and down 1 percent from 2010. Intended farrowings for December-February 2013, at 2.82 million sows, are down 1 percent from 2012 and down 1 percent from 2011.
Contractions
The numbers were about what analysts were expecting, and indicate that prices will rise through 2013, said economists on a media conference call hosted Friday afternoon by the National Pork Board and the Pork Checkoff.
“It’s pretty obvious that the industry’s gone into pretty significantly contraction,” said Dan Vaught, president of Vaught Futures Insight in Altus, Ark. “[Farrowing] intentions pretty much matched expectations so [we’re] moving into a contraction faster than expected — not surprising, given the big surge in corn.”
The trend will yield “smaller hog and pork supplies by next spring and summer and a significant increase in prices,” he said.
The industry is seeing a “reduction in the number of gilts being retained,” noted Altin Kalo, chief economist for Steiner Consulting Group in Manchester, N.H. “We basically have made a u-turn here from where we were in May and June when producers were looking to expand the herd.
“That has implications for pork production mostly for 2013, especially at the back end,” Kalo said.
In the fourth quarter, the economists projected that hog prices would range from a low of $60 per cwt to $77 per cwt. By the second quarter of 2013, they projected a price range for hogs between $80 per cwt and $107 per cwt.
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