Source: MEATINGPLACE, 10/22/13

A larger pig crop and breeding herd plus higher sow productivity all point to looser U.S. hog supplies beginning late this year, one Wall Street analyst predicts.

Hog slaughter was light in August and September, likely due to aggressive slaughter levels in the year-ago period, sow liquidation in the second half of 2012 and the impact of the PEDv virus, said BB&T Capital Markets analyst Heather Jones.

Anecdotal reports suggest the slaughter is not down as much in September, and supplies should start to ease in early to mid-October, Jones wrote in a note to clients.

The key unknown is the ultimate impact of the heavy PEDv outbreak in North Carolina, which is affecting an estimated 3.5 percent of the total U.S. sow herd, she said. But expansion of the herd and increased litter size could “meaningfully offset” the PEDv effect, she predicted.

“Barring a dramatic escalation in the PEDv outbreaks, which is not a given, it seems that the worst of the tight hog supply is behind the industry,” Jones said.

For more stories, go to www.meatingplace.com.