High corn prices cause US hog inventory to shrink
Higher corn prices have caused the US hogs and pigs inventory to continue to reduce, reports Dow Jones.
Recent data by the US Department of Agriculture (USDA) showed that the number of breeding and finishing hogs was at 99% in comparison to the previous year, in December 2010. Rich Nelson, analyst at Allendale Inc, said the total numbers had come down for the ninth consecutive quarter.
The swien data came in below the average of analysts’ estimates. The only figure that topped the analysts’ prereport average was pigs per litter at 102% of a year ago versus a 101% estimate average. The data were generally viewed as friendly for hog market.
Nelson was also quoted to say that the farrowing intentions, at 99% for December-February and 98% for March-May, were well below the pre-report estimates and suggest a ‘restart’ of reducing the herd due to high corn prices.
Private analyst Bob Brown said the close proximity of the March-May and December-February farrowing intentions also suggests the possibility of further herd liquidation, or reducing the breeding herd.
Further cutbacks in production and even a deficiency in overall meat supplies in 2011 were named as potential consequences.