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CME: Daily Livestock Report

22 June 2011

DowJones Newswires released results of its pre-report survey of analysts regarding their expectations of key numbers in Friday’s USDA quarterly Hogs and Pigs report, write Steve Meyer and Len Steiner.

The results appear in the table. It appears that “Steady as she goes” is the expected watchword for the US pork industry as most of the average estimates are very near 100 per cent of year-ago levels.

The only exceptions are Mar-May farrowings and June-Aug farrowing intentions which are near two per cent lower than last year in spite of a breeding herd that is expected to be marginally larger.

That would follow the pattern set in USDA’s March Hogs and Pigs report but defies anecdotal evidence that productivity rates in US farrowing units are still very high.

An aside on sow herd productivity: One of the reasons for rising litter sizes is the price of cull sows. High cull sow prices have made selling an older animal far less painful that it once was. In fact, for most of the past three years, producers could replace a cull sow with a new gilt for the amount of money received for the sow — and usually put up to $100 in the bank as well. That kind of economic benefit has encouraged producers to roll sow herds more quickly thus getting access to rapidly improving reproductive genetics being offered by today’s prolific sow lines. While keeping sows through litters 3, 4 and 5 of their productive lives is still best since those are usually the sows largest litters, keeping them beyond litter 5 may not be optimal due to the rate at which female lines are improving and the high salvage values that have been garnered by cull sows.

US chicken companies reduced the broiler hatchery flock by one per cent during May. USDA reported in its monthly Chicken and Eggs report that the hatcher flock numbered 54.79 million birds on June 1. That compares to 55.309 million birds on May 1 and 55.237 million birds on June 1, 2010. The year-over-year reduction amounts to 0.8 per cent. The June 1 flock is 4.3 per cent larger than it was at its most recent lowest level (52.529 million) on October 1, 2009.

While the May reduction is very normal from a seasonality viewpoint, the industry is showing signs of reducing output and symptoms of not reducing it earlier. Atlanta-based Cagle’s announced today that it would cut a shift at its Pine Mountain Valley,GA plant, laying off 300 workers and reducing throughput at the plant from 520,000 to 320,000 birds per week. Broiler egg sets have been below year-ago levels for 5 weeks straight, averaging 2.1 per cent fewer, year-on-year, since May 8.

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