DES MOINES, Iowa — U.S. hog and pig inventory rose 1 percent from December 2005, but dipped 1 percent from September 2006’s crop, with Iowa hitting another record number, according to the USDA’s latest report, released last Wednesday afternoon.

“Most of the numbers came in pretty close to pre-release trade estimates,” said Ron Plain, University of Missouri professor of agricultural economics. “So we’re not expecting anything as far as fireworks on the Chicago Mercantile Exchange on futures tomorrow.

“But anytime you get this close to the average, you sort of wonder whether or not someone may be missing something here,” he told U.S. farm reporters via a Dec. 27 teleconference on the USDA’s Quarterly Hogs and Pigs Report.

Sponsored by the Pork Checkoff at the National Pork Board in Des Moines, Iowa, Plain joined fellow panelists Dan Bluntzer, director of research at Frontier Risk Management in Robston, Texas, and John Nalivka, president of Sterling Marketing in Vale, Ore.

According to the Dec. 1 report, Iowa still remained the nation’s leading pork producer with 17.2 million hogs raised, which was the most ever counted in a December inventory - and the largest number of hogs raised on Iowa farms since September 1965.

The Dec. 1 inventory was up 600,000 from 2005, and up 200,000 from last September. The September-November 2006 pig crop peaked to 4.2 million head, with a total of 465,000 sows farrowed at an average litter size of 9.05 pigs per sow.

John Lawrence, Iowa State University extension agricultural economist, said last month was Iowa’s 34th consecutive profitable for farrow-to-finish operations in 51 years.

The USDA also said Iowa herds increased on state farms by 4 percent, compared to last December, which was far above the 1 percent increase in U.S. hog numbers.

In addition, the U.S. breeding inventory reached 6.09 million head, up 1 percent from last year and up slightly from the previous quarter, the report said. Market hog inventory, at 56.1 million head, was up 1 percent from last year, but down 1 percent from last quarter.

The September-November 2006 pig crop on U.S. farms topped 26.6 million head, up 1 percent from 2005 and up 3 percent from 2004. Sows farrowed during this period totaled 2.91 million head, up slightly from 2005 and up 1 percent from 2004; the sows farrowed during this quarter represented 48 percent of the breeding herd.

The USDA said average pigs saved per litter were 9.13 for the September-November 2006 period, compared to 9.03 last year. Pigs saved per litter by size of operation ranged from 7.60 for operations with 1-99 hogs and pigs to 9.20 for operations with more than 5,000 hogs and pigs.

The report also said U.S. hog producers intended to have 2.90 million sows farrowing during the December 2006-February 2007 quarter, up 2 percent from the actual farrowings during the same period in both 2006 and 2005; intended farrowings for March-May 2007, at 2.93 million sows, are up 1 percent from 2006 and up 2 percent from 2005.

“It’s kind of remarkable to see (a reduction) as quickly and dramatically as this pig report indicates,” Plain said.

Moreover, the total number of hogs under contract, owned by operations with over 5,000 head, but raised by contractees, accounted for 38 percent of the total U.S. hog inventory, down from 39 percent last year.

But Lawrence said U.S. hog producers’ profits may cease in 2007, due mainly to high supply costs and high corn prices.

Lawrence said his estimates on hog production costs revealed that corn prices reached 36 percent since January 2006. He said the cost of finishing individual hogs to a 260-pound market weight had jumped 10 percent, which has also affected producers’ profits.

In the early months of 2007, large hog supplies are expected to enter the market, which would likely decrease prices, Lawrence added.

But that’s where the increased production costs had resulted in higher corn prices, Lawrence said.

“I think we will see red ink in the first and fourth quarters,” he said. As a result, Nalivka said the higher corn prices would likely lead to higher costs for cattle, poultry and hog producers, as well as place limits on meat supplies - for now.

“There’s a lag time,” he said. “I’m not anticipating a tightening of the meat supply. If we see it, it will be in the latter part of 2007 and into 2008.”

In talking to hog producers who had stopped overproduction after enjoying such a long period of high profits, Bluntzer said, “It was very apparent that the industry as a whole is telling itself, ‘Let’s not mess this up by expanding like we used to do.’”

For 2007, Plain forecasted the live weight per hundredweight projections at $44 to $47 in the first quarter; $47 to $50 in the second quarter; $44 to $47 in the third quarter; and $40 to $43 in the fourth quarter, with the break-even level at $50.

Bluntzer said his carcass weight price projections were $63.50 for the first quarter; $67 for the second quarter; $66 for the third quarter; and $59 to $60 for the fourth quarter.

This farm news was published in the Jan. 3, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.