Yesterday, April 28, USDA and Statistics Canada released the April 1 Canadian inventories of hogs and pigs, and the combined March 1 US and April 1 Canadian herd numbers.
On April 1, there were 1,359,200 head in the Canadian breeding herd. This is down 15% from the high of 1,633,600 head on January 1, 2005. The kept for market inventory was 10,502,000 pigs, the lowest number since sometime in the late 1990’s.
The combined North American breeding herd stands at 7,394,000 head. This is off 4.8% from the peak of 7,763,800 head on March/April 1, 2002. The combined kept for market inventory is 69,880,000 head, down 5.95% from the peak of 74,241,800 at the end of the 2007 year.
On April 2 at the VitaPlus Swine Summit held at Morton, MN, Mark Greenwood from AgStar suggested that the US needs to reduce its total swine inventory by 2.5 million pigs to be successful long term (http://vitaplus.com/swine-summit.php). I don’t know if his estimate is correct or not, but it does suggest that liquidation will be ongoing.
The impact of ‘swine flu’ rumors and misinformation on futures prices and even local market hog prices in the past 2 days can’t be denied. I suspect that many producers who were thinking about trying to ride out the latest period of low to negative returns are now seriously considering an exit strategy. It takes a lot of optimism these days to remain in pork production.