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Hog herd inches higher -- USDA

03/28/2013 @ 3:26pm

The number of hogs and pigs on U.S. farms as of March 1 was nearly 1.5% above a year ago, according to federal data released Thursday afternoon.

The U.S. Department of Agriculture reported the nation's hog and pig herd at 65.911 million head, up about 0.8% from the average of analysts' estimates. The all-hogs figure was 1.3% above the five-year average of about 65.045 million.

In the quarterly inventory data, the USDA reported the nation's swine breeding herd as of March 1 at 5.834 million head, up 0.2% from a year ago. The government's breeding-herd figure was 1.3% below the five-year average of 5.912 million.

Productivity of sows continues to improve, which means fewer adult female hogs are needed to produce the same number of pigs.

The number for pigs per litter for the December-February period was 10.08, a 0.5% increase from a year ago, to the largest-ever for that period.

"With roughly the same breeding herd and only a little creep up, the winter pig crop beat the previous record by about 450,000 head," said Bob Brown, private analyst in Edmond, Okla. "Productivity trumps everything," Mr. Brown said.

The USDA reported the number of hogs kept for marketing as of the beginning of March at 60.077 million head, up 1.6% from a year ago. Analysts had estimated marketings to be about 59.590 million head.

The breeding herd was just slightly below the average of analysts' expectations of 5.837 million head in a Dow Jones Newswires survey.

Producers expanded their herds modestly during the winter. During the last quarter of 2012 and at the beginning of this year, many held high expectations for hog prices and pork demand by late spring and later. Futures prices at that time carried wide premiums in the summer contracts with June and July at times over $1 a pound, high enough to compensate for expensive feed and still leave a profit for producers.

In addition, in late 2012, pork exports were on their way to setting an all-time high for the year, U.S. cattle supplies were the smallest in decades, and expectations for much improved corn and soybean crops in the year ahead were pointing to an extended period of profitability for hog producers.

A steep slide in hog cash and futures prices beginning in early February extending through much of March due in part to a slow start in 2013 pork exports may cause producers to reconsider their plans for the balance of the year. They did not have time to make any adjustments in their production plans for the March 1 survey, however, since it takes about 10 months from the time a sow is bred to when the resulting pigs will reach slaughter size.

The weight categories for marketings pointed to about 1.2% more hogs to be available for slaughter this summer, compared with a year ago.

Rich Nelson, an analyst with Allendale, a brokerage in McHenry, Ill., considered the report "bearish." The trade "thought there'd be a shortfall in hogs for the summer ahead, but we'll actually have even more in that time frame than last year," said Mr. Nelson, noting that the USDA estimate of nearly-market-ready hogs was 2.1% higher than the average trade estimate, as compiled by Dow Jones Newswires. "For hog futures ... yes, this is bearish, and will limit the rally going on" this week," said Mr. Nelson.

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