DES MOINES, Iowa (AP) -- Farmers in the nation's leading hog-producing states have drastically reduced the number of sows in their herds, the government reported Friday.
Analysts said they expected the cutbacks in breeding stock to continue through the rest of this year, pointing to a rebound in hog prices from the four-decade lows of late last year.Chuck Levitt, a senior livestock analyst with the Alaron Trading Group in Chicago, said the government's numbers should translate into hog prices around $40 to $50 per hundred pounds this summer, a huge recovery from prices as low as $8 per hundredweight in December.
Chris Hurt, a livestock marketing economist at Purdue University in West Lafayette, Ind., said that with production costs hovering around $36 to $38 per hundredweight, hog prices should hit the break-even point for most farmers by late May.
"The breeding herd today is most highly correlated with profits or losses a year ago. If you want to know when the breeding herd is going to get the smallest, look at when the losses were the worst a year ago," said Herd. "The breeding herd will continue to shrink all the way through this year and reach its minimum probably about a year from now in March or June 2000.
"Then the smallest supply of pigs will come in the summer or fall of 2000," he said.
The quarterly hogs and pigs report released Friday by the U.S. Department of Agriculture showed that U.S. hog numbers totaled 59.9 million head as of March 1, down 1 percent from a year ago and down 4 percent from the previous quarter.
But Hurt said the truly dramatic changes came in the number of sows being kept for breeding, where 13 of the nation's leading hog states saw reductions from a year earlier. Iowa, the nation's leading hog-producing state, saw the number of sows drop 6 percent from 1.3 million in March 1998 to 1.22 million this year.
Wisconsin saw the biggest drop, at 19 percent, while Illinois, Kansas and Michigan all saw 15 percent decreases in their breeding herds.
Herd said the reduction in sows is farmers' response to record-low prices and a glut of hogs heading to market at the end of 1998.
"Those are big adjustments and I think that's where you are seeing the response," he said.
The number of pigs bred from December through February stood at 25.3 million head, down 1 percent from the same period of 1998 but 9 percent more than 1997. Herd said the sows that produced those pigs had already been bred when the low prices hit and farmers generally don't sell off pregnant sows.
U.S. farmers intend to farrow 2.88 million sows from March through May this year, down 7 percent from the same period of 1998. Intended farrowings for June through August, at 2.84 million sows, also are 7 percent below 1998 levels.
Herd said his advice for all hog farmers is to hold steady for now.
"Don't make any really huge major decisions until we can see the year 2000, especially, the first half of the year, and see if this industry can get price recovery," he said. "Don't just throw up your hands and get out and don't make any big investments."
At 14.6 million head, Iowa's hog population as of March 1 was up 4 percent from a year ago. That outdistanced No. 2 North Carolina, which reported a hog inventory of 9.5 million, unchanged from a year ago.
North Carolina, however, continued to lead the nation in pig production for the December-February quarter, with 4.69 million head born during the period, up 2 percent from a year earlier. Iowa produced 4.17 million pigs during the period, down 8 percent from a year earlier.