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Quarterly Hogs and Pigs Report Shows Higher Inventory

The National Agricultural Statistics Service released the Quarterly Hogs and Pigs Report on Wednesday, which showed that the U.S. herd numbered 66.6 million head on Sept. 1, 2011. That was 1% higher than a year ago and 3% higher than the June 1, 2011 report.

Market hog inventory matched the percent increases for total hogs from last year and last quarter at 1% and 3% respectively coming in at 60.8 million head. Breeding inventory was also slightly higher than last year and last quarter at 5.81 million.

Sows farrowed during the period of June to August were down 1% from 2010 and down 2% from 2009, although the pig crop was up 1% from each of those years. The average pigs saved per litter was a record high 10.03 for the June-August 2011 period, compared to 9.81 last year.

According to the report, producers plan to have 2.87 million sows farrowing between September and November, which is down slightly from actual numbers from the same quarter last year. At 2.86 million sows, intended farrowings for December to February are up slightly from 2011 but down 1% from 2010 at 2.86 million head. 

Hog prices were down significantly as electronic overnight trade began according to economist Altin Kalo of Steiner Consulting in Manchester, N.H. He says the question about that is whether participants are responding to the report or are following through in response to the sharply lower grain prices seen Wednesday.

"The numbers in the report were fairly close to pre-report  estimates,"  Kalo said. "Generally they were slightly higher than what the market was expecting but not excessively so. On the overall inventory the number came in about half a percent higher than what the expectation was. Same thing for the breeding herd and the same thing for the marketings."

Kalo says he thought producers might have responded to higher feed costs by cutting down on the number of pigs coming to market, but instead they were higher. 

"The fact I think that these numbers did not show that, it actually showed overall inventories were a little bit higher than what the expectations were, may be viewed as moderately bearish for markets when the open tomorrow," Kalo said.