1. Vol. 10, No. 189 October 1, 2012
USDA’s quarterly Hogs and Pigs Report, USDA QUARTERLY HOGS & PIGS REPORT
released Friday afternoon, contained few surpris- September 28, 2012
es relative to pre-report expectations and indi- 12 as Pct Report Actual -
cates a rapid (and perhaps TOO rapid) shift from
expansion to contraction for the U.S. swine sector.
Category 2011 2012 of '11 Estimates Estimate
The key national data appear in the chart at right. Inventories on Sept 1
Some implications of the key numbers are: All hogs and pigs 67234 67472 100.4 100.7 -0.3
 The 5.788 million head breeding herd was 0.3% Kept for breeding 5806 5788 99.7 99.9 -0.2
lower than on year ago. That is a slightly larger Kept for market 61428 61684 100.4 100.8 -0.4
reduction than the surveyed analysts, on aver- Under 50 lbs. 19761 19653 99.5 99.9 -0.4
age, expected but the number does not fit well
with what we know of sow slaughter and gilt re- 50-119 lbs. 17884 17675 98.8 100.1 -1.3
tention since June. The Sep 1 inventory is 120-179 lbs. 12822 12899 100.6 100.8 -0.2
pegged by USDA to be 74,000 head lower than 180 lbs. and over 10961 11457 104.5 102.6 1.9
on June 1. Last year the sow herd increased by Farrowings2
3,000 head during the June-Aug quarter. That is June-Aug sows farrowed 2927 2892 98.8 99.2 -0.4
a year-on-year difference in sow herd change of Sep-Nov Intentions 2929 2850 97.3 98.7 -1.4
77,000. But net slaughter of U.S. sows this year
was actually 1,779 head LOWER for the 13 Dec-Feb Intentions 2864 2821 98.5 98.4 0.1
weeks ended August 28 this year while total gilt June-Aug Pig Crop1 29355 29286 99.8 100.2 -0.4
slaughter, according the University of Missouri June-Aug pigs saved per litter 10.03 10.13 101.0 100.9 0.1
survey data, was 54,690 head higher. While *Thousand head **Thousand litters
many EXPECTED the breeding herd to be sharp-
ly lower, it looks to us that the only way it could be USDA QUARTERLY GRAIN STOCKS REPORT
this much lower was for sow death loss to be September 28, 2012
unusually high. That is possible given this sum-
Analysts' Estimates
mer’s heat but we still think the larger liquidation
is yet to come. USDA, USDA, USDA,
 The market herd continued to be larger than last Units Sep 1 '11 June 1, '12 Low High Average Sep 1, '12
year, primarily on the strength of a 180-lb. and Corn Bil. Bu. 1.127 3.149 0.887 1.350 1.145 0.988
over inventory that was 4.5% higher on Septem- Soybeans Bil. Bu. 0.215 0.667 0.110 0.152 0.130 0.169
ber 1. That figure fits reasonably well with Sep- Wheat Bil. Bu. 2.147 0.743 2.090 2.533 2.272 2.104
tember slaughter which has been 5.5% higher Source: Bloomberg
than last year but it doesn’t fit well with the other
inventories in this report or the Mar-May pig crop (29.441 million ters. Our computations show numbers down only 0.4% for Q4-
head, +0.6% yr/yr) in the June report. We don’t think this many 2012 and that number could be too negative if sow slaughter picks
pigs actually weighed over 180 at the beginning of the month even up in November and December. The report data imply year-on-
though they got slaughtered during the month. But they are indeed year slaughter declines of 0.7%, 1.5% and 0.5% for the first three
gone and that should help the supply situation in the future. quarters of 2012. Those numbers could be slightly more negative
if Canada’s herd shrinks at a faster pace than does the U.S. herd.
 Farrowing intentions — especially those for the Sep-Nov quarter— USDA’s bombshell of the day was Friday morning’s esti-
look to be low relative to the breeding herd. This has been the mate of September 1 — ie. year-end — corn stocks of only 988
case with several recent reports and the pattern is for actual far- million bushels. The trade had, on average, expected that number to
rowings to be higher than the intentions. This summer’s heat and be comfortably above the 1 billion mark, an expectation fueled in no
the difficulty it likely caused for breeding efficiency would certainly small part by USDA’s increasing the estimated year-end stocks from
be supportive, however, to the lower Sep-Nov intentions number. 1.021 billon in August to 1.181 billion in September. June-August dis-
 Pigs saved per litter hit another record of 10.13 in the June-August appearance of 2.16 billion bushels was sharply lower than last year’s
quarter. The annual growth rate of 1% is larger than last quarter’s 2.54 billion bushels. Corn future were limit up for December and March
0.6% but still well below the 2008-2011 trend of 2%. Economic on Friday while May and July gained 39.5 and 38.0, respectively.
hard times and liquidation will very likely increase the rate of Those contracts were another 5-6 cents higher this morning. Soybean
growth again by eliminating poorer performing sows. stocks came in sharply higher than the September estimate and expec-
 The report still implies lower supplies in each of the next four quar- tations but bean and meal prices rose in sympathy with corn on Friday.
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2. Vol. 10, No. 189 October 1, 2012
PRODUCTION AND PRICE SUMMARY Week Ending 9/29/2012
Current Pct. Pct. Pct.
Item Units Week Last Week Change Last Year Change YTD Change
Total Meat & Poultry Prod. Million lbs. 1763.5 1752.8 0.60% 1779.6 -0.91% 64,995 -1.07%
C FI Slaughter Thou. Head 651 623 4.49% 679 -4.08% 24,284 -4.12%
A FI Cow Slaughter Thou. Head 127.9 108.6 17.72% 147.7 -13.41% 4,419 -4.33%
T Avg. Live Weight Lbs. 1316 1315 0.08% 1285 2.41% 1,298 1.85%
T Avg. Dressed Weight Lbs. 794 793 0.13% 776 2.32% 788 2.08%
L Beef Production Million Lbs. 516.3 493.5 4.62% 524.9 -1.64% 19,085 -1.99%
E Live Fed Steer $/cwt live wt. 122.46 125.32 -2.30% 120.09 1.97%
Dressed Steer $/cwt carcass 190.99 195.02 -2.07% 188.47 1.34%
& OKC Feeder Steer 600-700 Lbs. 151.79 152.76 -0.63% 136.44 11.25%
Beef Cutout 600-750 Choice 191.77 194.11 -1.21% 183.19 4.68%
B Hide/Offal $/cwt live wt. 13.41 13.54 -0.96% 13.46 -0.37%
E Rib Choice 286.87 293.15 -2.14% 278.81 2.89%
E Round Choice 171.30 173.02 -0.99% 165.92 3.24%
F Chuck Choice 166.87 165.56 0.79% 153.32 8.84%
Trimmings, 50% Fresh 49.04 54.11 -9.37% 89.33 -45.10%
Trimmings, 90% Fresh 203.40 206.87 -1.68% 170.23 19.49%
H FI Slaughter Thou. Head 2345 2406 -2.54% 2253 4.08% 82,074 2.04%
O FI Sow Slaughter Thou. Head 64.9 53.6 21.10% 65.0 -0.18% 2,094 -0.60%
G Avg. Dressed Weight Lbs. 202 202 0.00% 204 -0.98% 206 0.39%
S Pork Production Million Lbs. 474 485.6 -2.39% 458.5 3.38% 16,889 2.47%
Iowa-S. Minn. Direct Avg. 74.48 68.44 8.80% 89.60 -16.90%
& Natl. Base Carcass Price Weighted Avg. 73.95 70.48 4.90% 87.80 -15.80%
Natl. Net Carcass Price Weighted Avg. 76.41 72.84 4.90% 90.70 -15.80%
P Pork Cutout 200 Lbs 79.41 77.00 3.10% 97.83 -18.80%
O Hams Primal Cutout 68.08 65.85 3.40% 86.98 -21.70%
R Loins Primal Cutout 88.75 85.82 3.40% 114.60 -22.60%
K Bellies Primal Cutout 110.46 106.27 3.90% 113.85 -3.00%
C Young Chicken Slaughter* Million Head 154.23 154.89 -0.42% 160.20 -3.72% 5,793 -4.10%
H Avg. Weight Lbs., RTC 4.29 4.31 -0.52% 4.32 -0.69% 4.3 -0.07%
I Broiler Production Million Lbs., RTC 661.8 668.1 -0.94% 692.2 -4.39% 24,960 -3.11%
C Eggs Set Million 188.8 183.7 2.79% 187.8 0.51% 7,432 -2.84%
K Chicks Placed Million Head 159.1 160.5 -0.91% 157.9 0.73% 6,215 -2.46%
E 12-City Broiler Composite 82.74 83.24 -0.60% 72.35 14.40%
N Georgia Dock Broiler 2.5-3 Lbs. 95.23 94.96 0.30% 86.59 10.00%
Northeast Breast Skinlss/Bonelss 136.77 143.94 -5.00% 127.91 6.90%
Northeast Let Quarters 52.15 51.93 -8.20% 52.96 -3.60%
T Young Turkey Slaughter* Million Head 4.66 4.48 3.93% 4.37 6.52% 166.9 -0.21%
U Avg. Weight Lbs. 23.90 23.58 1.39% 23.79 0.47% 24.3 2.08%
R Turkey Production Million Lbs. 111.3 105.6 5.37% 104.0 7.02% 4,062 2.00%
K Eastern Region Hen 8-16 Lbs. 110.86 110.00 0.80% 112.2 -1.20%
F Corn, Omaha $ per Bushel 7.13 7.36 -3.13% 6.20 15.00%
E DDGS, Minnesota $ per ton 270.00 272.50 -0.92% 187.50 44.00%
E Wheat, Kansas City $ per Bushel 8.81 8.78 0.34% 6.69 31.69%
D Soybeans, S. Iowa $ per Bushel 15.83 16.39 -3.42% 12.15 30.30%
SB Meal, 48% Central Illinois $ per Ton 490.10 499.80 -1.94% 317.50 54.40%
* Chicken & turkey slaughter, production and prices are 1 week earlier than the date at the top of this table. Cow & sow slaughter are for 2 weeks earlier