| OU 346 | August 4, 1999 |
SWINE SITUATION -- MAJOR CRISES!
R.W. Sutton, Extension Ag. Economist
J.E. Albrecht, Extension Animal Scientist
General: The swine industry and especially the independent swine market is in a major crises. For almost two years, nearly all producers and contractors have been in a negative financial position. Especially hurt has been those producers who produce and market hogs without some form of contractual arrangement.
The recent hog report, along with the present feed situation, essentially assured
the industry of not much hope of significant recovery during this year. The
June Report was another disappointment as total numbers remained at high levels.
Mid-west producers are facing a corn market of only about $1.80 per bushel with
not much prospect for improvement with the large harvest that is getting ready
to take place.
There is a good deal of national/international activity that might impact
producers, but it may be too little too late for most. For example, the bill,
"Pork Industry Mandatory Reporting Act of 1999" will require packers/buyers
to report daily prices and conditions. This will assist in the decision making
process for producers. Other activity such as the $125 million in Section 32
funds for direct assistance to pork producers will help, but it will not be
a long-term solution.
Mid-Year USDA Report: The mid-year 1998 Hogs and Pigs Report of 60.54
million head was three percent below June 1998 but one percent over March 1999.
There is still a "more-than-ample supply" of hogs. Market numbers were especially
higher in the heavier weight categories and this will keep some pressure on
near-term summer markets. Breeding numbers were 6 percent less than June 1998
but this is dampened by the increase in pigs per litter. The June USDA inventory
data are reported in table 1.
Table 1. USDA U.S. Hogs and Pigs Report; June 1999.
| Category | 1999 | 1998 | 1997 | 1996 | '99vs'98 | '99vs'97 |
| *** U.S. June 1: | - - - - - - - - - - - million head - - - - - - - - - - - | |||||
| All Hogs And Pigs | 60.536 | 62.213 | 57.366 | 59.990 | - 3% | +6% |
| Kept For Breeding | 6.515 | 6.958 | 6.789 | 7.060 | - 6% | - 4% |
| Market | 54.020 | 56.254 | 50.577 | 52.930 | - 2% | +7% |
| Under 60 Pounds | 20.502 | 21.482 | 19.988 | 19.556 | - 5% | +3% |
| 60-119 Pounds | 13.331 | 13.711 | 12.574 | 13.087 | - 3% | +6% |
| 120-179 Pounds | 11.021 | 11.084 | 10.002 | 10.941 | - 1% | +10% |
| 180 Pounds & + | 9.167 | 8.978 | 8.013 | 9.346 | +2% | +14% |
The June farrowing intentions (table 2) suggests a general reduction in immediate
future breeding numbers. However, given current and expected fall feed prices,
one would expect the JUN-AUG and especially the SEP-NOV projections to be under-estimated.
This has been the usual situation with cheap feed. The trend for the MAR-MAY
and JUN-AUG intentions between the March to the June Report will likely continue.
Table 2. USDA U.S. Hogs and Pigs Report Farrowings and Intentions; 1998-99
Reports;
1999 Intentions; June 1999; and, Dec-Feb Pig Crop and Pigs Per Litter.
|
---------------Report Month--------------- |
|||||||||
| Quarter | Year | ||||||||
|
|
June
|
March
|
Dec.
|
Sept.
|
|||||
| DEC-FEB | 1998-99 | -1% | -1% | ** | -5% | ||||
| MAR-MAY | 1999 |
-3%
|
-7% | ** | -4% | * | |||
| JUN-AUG | 1999 |
-4%
|
**
|
-7% | * | ||||
| SEP-NOV | 1999 |
-4%
|
* | ||||||
|
|
|||||||||
| PIG CROP | (MAR-MAY)............26,301 thou. head; -3 (vs. '98); +4%(vs. '97) | ||||||||
| PIGS/LITTER | (MAR-MAY)............ 8.80 head; +1%(vs. '98); +1%(vs.'97) | ||||||||
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