Slightly larger hog production expected in 2012

by Meat&Poultry Staff
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WASHINGTON – On Dec. 23, estimates published in The Quarterly Hogs and Pigs report issued by the US Department of Agriculture suggest there will be a small increase in the supply of slaughter-ready hogs in 2012, according to the Jan. 19 Livestock, Dairy and Poultry Outlook from the US Department of Agriculture’s Economic Research Service. Such increases will likely be due to modest farrowing increases and continued-strong gains in litter rates.

Expected hog production increases in 2012 appear set to depend less on expanded breeding inventory numbers, and more on increasing litter rates via genetic improvements, along with enhanced management and animal-care technologies.

Producers farrowed slightly more sows (0.5 percent, year-over-year) in the fall quarter of 2011, the quarterly report indicated. However, strong year-over-year gains in the litter rate yielded a pig crop almost 2 percent greater than the fall 2010 crop. A larger second-half 2011 pig crop (0.7 percent larger summer 2011 pig crop, and a 1.8 percent larger fall 2011 pig crop) points to a larger first-half 2012 hog slaughter.

Hog producers intend to farrow fractionally fewer sows (0.1 percent) in the first half of 2012 compared with the same period a year ago, the report also indicated. Forecasted year-over-year larger litter rates, however, are expected to lift first-half pig crops — which are slaughtered in the second half of 2012 — to almost 2 percent ahead of second-half 2011 pig crops.

Larger pig crops available for slaughter in 2012, about the same number of live swine imports from Canada plus slightly higher estimates for average dressed weights combined, are expected to result in total commercial pork production of 23.2 billion lbs. this year, which is a year-over-year increase of almost 2 percent.

Hog and pork prices in 2012 are expected to reflect slightly larger hog supplies, in the face of expected-small production increases and stable exports. But significantly higher prices for substitute animal proteins — beef, in particular — are expected to provide some support for US pork sector prices in 2012. Prices of live 51-52 percent hogs are expected to average $63-$65 per cwt for the first quarter, $66-$70 per cwt in the second quarter, $66-$72 per cwt in the third quarter, $57-$61 per cwt in the fourth quarter and between $63-$67 per cwt for the year.

Meanwhile, retail pork prices are expected to average in the mid-to-low $3.50s per lb. in 2012.

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