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Expert: U.S. pork farmers enjoy 2 years of black ink
By DOUG SCHMITZ
Iowa Correspondent

CLIVE, Iowa — The USDA’s Quarterly Hogs and Pigs Report, released last week, showed a 1 percent increase in total U.S. hog numbers to 60.1 million head on March 1, compared to last March, but down 2 percent from last December’s 61.2 million count.

“The number that continues to surprise me is that we’ve had a tremendously disciplined industry for 18 months or more,” said John Lawrence, an Iowa State University extension livestock economist. “We’ve had a profitable time in 2004 and 2005. In fact, based on our estimated returns, we’re up about 26 months of consecutive black ink.

“What I’m looking for is probably through this summer we’ll add another four or five months to that,” he said. “Our longest consecutive strength is about 33 months going back in with December 1976 to about August 1979. So we may challenge that.”

Funded by the Pork Checkoff at the National Pork Board in Clive, Iowa, Lawrence, along with Chris Hurt, a Purdue University professor of agricultural economics, and Bob Brown, an independent market analyst from Edmond, Okla., hosted a teleconference with U.S. farm reporters to discuss the latest quarterly report conducted by the National Agricultural Statistics Service (NASS).

According to the USDA, the latest report was gathered from the March Hogs and Pigs Survey taken by U.S. pork producers, which gathers data about market hog and breeding stock inventories, and farrowing intentions for the next six months that allows analysts to forecast expansions and contractions of pork production.

Producers were asked to report during the late February to mid-March data collection period, which provides ag economists the opportunity to provide data for pork producers, buyers, meatpackers and exporters on the supply of market hogs available during the next six months.

The March 31 report said the breeding inventory, at 6.03 million head, was up 1 percent from 2005 and up slightly from the previous quarter, with market hog inventory at 54.1 million head, up 1 percent from last year but down 2 percent from last quarter.

The December 2005-February 2006 pig crop was at 25.7 million head, up 1 percent from 2005 and up 2 percent from 2004.

“The December pig crop was a record by a little bit over the previous high,” Brown said.

In turn, sows farrowing, which made up 47 percent of the breeding herd during this period, totaled 2.84 million head, up slightly from both 2004 and 2005.

“Productivity is really what’s fueled a lot of the increases in supply the last couple of years as we’ve just slowly built the breeding herd,” Lawrence said. “If you look at the numbers, there is an additional 84,000 sows that were not there a year ago.

“If you add to the productivity that we’re seeing in pigs per litter of litters per sow, that’s somewhere between 1.5 and 1.75 billion additional hogs next year from those additional sows,” he said.

Moreover, the USDA said the average pigs saved per litter was 9.03 for the December 2005-February 2006 period, compared to 8.94 last year, with pigs saved per litter by size of operation ranged from 7.50 for operations with 1-99 hogs and pigs to 9.10 for operations with more than 5,000 hogs and pigs.

Overall, the report said U.S. hog producers intend to have 2.90 million sows farrow during the March-May 2006 quarter, up 1 percent from the actual farrowings during the same period in both 2004 and 2005.

As a result, intended farrowings for June-August 2006 were at 2.92 million sows, up slightly from 2005 and up 1 percent from 2004, Hurt said.

“The numbers (are) pretty much in line,” he said. “I think we wouldn’t say, certainly relative to the data we saw this morning on the planning intentions, this one is not nearly as dramatic. On the marketing hog side, we did see those numbers almost 9/10th of a percent lower than the expectations.”

In addition, the total number of hogs under contract, owned by operations with over 5,000 head, but raised by contractees, accounted for 39 percent of the total U.S. hog inventory, unchanged from 2005.

Hurt said the three states having the largest increases in hog numbers were Iowa, Indiana and Missouri, with Iowa remaining the nation’s No. 1 hog producer at a total inventory increase of 16,300 head. Both Iowa and Indiana had increased sow numbers at 20,000, up 2 percent from last quarter; Missouri increased its sow numbers by 15,000, Hurt said.

“We know that’s dominated by sows but that was their actual breeding herd numbers,” he said. “Those three states account for about 60 percent of the total increase.”

Lawrence forecasted hog prices for the next four quarters for Iowa and southern Minnesota as follows: April-June, $44-$47; July-September, $44-$47; October-December, $39-$42; and January-March 2007, $38-$41.

For more information on the USDA’s Quarterly Hogs and Pigs Report, visit www.nass.usda.gov/Publications

This farm news was published in the April 5, 2006 issue of Farm World.

4/5/2006