The latest count of hog and pigs across the country (released June 26) provides producers with differing views on what may happen to hog prices over the next year or two. For those who thought the current hog expansion was coming to an end, the USDA reported the nation's swine breeding herd as 1% larger than a year ago. This was at the lower end of pre report expectations. For those who thought the expansion would continue or even pick up steam, the farrowing intentions for this summer and fall were reported to expand by 3% and 4% respectively. Can we have more farrowings out of a slightly larger breeding herd or is the breeding herd underestimated.?? The answer to this question will determine whether market hog prices are marginally profitable in 1999 or below the cost of production. Of course, feed cost are yet to be determined and this too will go a long way toward determining industry profits.
 

While the longer term numbers may be in question, short term market hog numbers should be up 5 to 6 % through this fall. If USDA numbers are accurate, total hog slaughter this year will be over 99 million head as compared to the previous record slaughter year of 96 million head in 1995.
 

Prices are expected to remain in the low $40's through the summer before falling back into the 30's by this fall. For the year as a whole, an average price of about $38 looks likely - the lowest annual average price since 1974's $35/cwt. average.
 

Georgia numbers continue to trend downward, reflecting a move toward producing pigs for shipment to other parts of the country for finishing. This is a natural response to the unstable market situation experience in Georgia the past few years which has resulted in market hog price discounts as compared to other national markets. Total Georgia hog numbers are down 13% as compared to June 1, 1997. However the Georgia breeding herd was down 9% while market hog numbers showed a 14% decline.
 

Given the uncertainty of future supplies and the low price situation, it is important to note two key long term positives for the pork industry. First, despite the economic problems in Asia, U.S. pork exports have grown while imports have shrunk. For instance, during the first quarter of 1998 pork exports were up 51% while imports declined 8% as compared to the previous year. For a number of reasons, the U.S. is now poised to take a significant portion of the world pork trade over the next few years. Secondly, retail prices didn't have to drop much to move the large pork supplies produced so far this year. This means that the demand for pork is strong and quite likely growing.

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