On Friday, USDA will release the results of their latest survey of the U.S. swine inventory.
Ron Plain, University of Missouri economist, calculates the breeding herd is a half percent larger than a year ago, and he thinks the total herd is 2.8 percent bigger than on September 1, 2006.
"I expect USDA will make some upward revisions in their previous inventory estimates," he says. "Hog slaughter during June-August was roughly 1.2 percent higher than expected based on USDA's June Hogs and Pigs Report. Half of the difference was due to higher imports of slaughter hogs from Canada, which were up 27.7 percent. Slaughter of U.S. raised hogs was 0.6 percent higher than the June report implied. Either more pigs were born or fewer died than expected."
Pork producers told USDA for the June report that they'd up June-August farrowings by 1.6 percent over a year earlier and that they'd boost September-November farrowings 0.4 percent.
"I agree that summer farrowings were in line with producer intentions," says Plain. "But I think fall farrowings will be 0.8 percent larger than last year."
Plain forecasts winter farrowings will be up 0.4 percent compared to last year. Feeder pig imports from Canada were up 4.8 percent this summer, so the lightweight market hog inventory could be up a bit more than the pig crop implies.
Plain's estimates suggest that fourth quarter hog slaughter will be about 3.6 percent above last year, if slaughter hogs from Canada continue coming above year-ago levels. He expects fourth quarter prices to average around $44/cwt.
"If my estimate of the light weight inventory is correct, first quarter 2008 hog slaughter should be nearly 3 percent larger than the number slaughtered in January-March 2007," he says. "If so, look for first quarter 2008 hog prices to average close to $45/cwt on a live basis."