Hog Numbers Down But Not Enough!
 

According to the USDA Hogs & Pigs report (released June 25), the hog and pig population in the U.S. continued to decline through the end of May. But the pace of reduction suggests that a return to profitable prices is still some time in the future.

As of June 1, 1999 the total hog population was 60.5 million head, 3 percent below a year ago. The breeding herd inventory on June 1 was 6.5 million head, down 6 percent from a year ago. The market hog inventory was 54.0 million head, 2 percent lower than 1998's.

The only market hog category that posted a year-to-year increase was the 180 pounds and up which was 102 percent of a year ago. The 120-179 pound, 60-119 pound and under 60 pound categories were 1, 3 and 5 percent below a year ago, respectively. So, 1999's slaughter is forecast to be very close to 1998's record large number with the third quarter slaughter being about 1 percent below 1998's and the fourth quarter being about 4 percent smaller.

Both summer's and fall's farrowing intentions (June - August and September - October) were reported at 4 percent below a year ago. If these intentions were to hold and the number of pigs born per litter were to continue to increase, both Winter (January - March) and Spring (April - June) quarters of 2000 would see slaughter down less than 4 percent from 1999's.

All of this would suggest that hog prices are not going to be as high as anticipated. Prices in the third quarter may well hold out to average in the mid-$30's. But hog prices during the fourth quarter have a very real risk of falling into the $20's again. It may be the middle to end of the first quarter of 2000 before hog prices move back to the mid-$30's and longer still before industry profitability is returned. (John McKissick)

Back to Hog Outlook