Agricultural News
Analysts' Price Forecasts For Remainder of 2012 Little Changed By Hogs and Pigs Report
Fri, 30 Mar 2012 17:38:34 CDT
The March 2012 inventory of all hogs and pigs grew two percent year over year in the latest USDA report, but the March 2012 number slipped the same two percent over the last quarter. Analysts said the relatively slight changes in inventories are not strong enough to drive any swings right now in the markets. Price expectations for the rest of the year are trending downward. They say it's not the supply they are most concerned about, it's sluggish demand.
The breeding inventory of 5.82 million head increased one percent from last year and is up slightly from last quarter. The market hog inventory of 59.1 million head showed the same two percent increase from this time last year and the same two percent drop from last quarter as hog numbers overall.
The December 2011 to February 2012 pig crop was up three percent from 2011 and the average pigs saved per litter was a record high 9.97.
Oklahoma showed a slight increase in both breeding and market hogs, up one percent over last year's numbers. The total inventory stands at 2.33 million head, compared with 2.31 million head a year ago. Oklahoma ranks eighth in total inventory among hog producing states.
Market analysts were generally not encouraged by the increased corn acreage reports, citing concerns that the increases came at the cost of soybean acres. Increasing feed costs tempered their predictions of hog prices for the remainder of the year.
Analysts' expectations of hog prices throughout the remainder of the year were somewhat pessimistic. Second quarter projections ranged from $87 to $90. Third quarter forecasts were from $87 1/2 to $89. Fourth quarter projections were for prices in the $75 to $80 range.
Karl Skold, president of Westside Economics in Omaha, Nebraska said his projections are predicated on relatively weak demand compared with the recent past.
"We're comparing ourselves to a pretty high bar. We had very strong exports during the first part of the year due to South Korea and then we had the Japanese situation where we added another boost in exports and then, finally, China. And I think that helped keep the domestic market very clean and very strong."
He says economic trends across the broader economy are slightly positive, but, "just like last year, we're faced with $4 gas and a consumer that's nervous about spending and looking for ways to cut back. The prices for hams are a little disappointing going into Easter. Bellies really haven't been able to get a footing on the processed meat side."
Len Steiner, president of the Steiner Consulting Group in Manchester, New Hampshire says the lagging demand for pork and poultry products is somewhat surprising given the strength of beef. But, he says, doesn't see a lot of room for improvement on the horizon just yet.
"A significant pickup in exports would fix a lot of this, but I don't see that occurring right now. The export market doesn't seem to be improving beyond anything we expected earlier. If anything, it's maybe a little shakier than what I had expected six weeks ago."
Click on the LISTEN BAR below to hear an in depth discussion of the current Hogs and Pigs report with Len Steiner, Karl Skold, and John Nalivka, president of Sterling Marketing in Vale, Oregon.
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