UJIITED STATES DEPAIRTM1rT OF AGRICULTURE v
Bureau of Agricultural Economics
HS-1 ..NovemberT 136
STHE HOG SITUATION
j .---- ---- -- -- ._ .- .^. -.,.- ,.,--.. -.. .. -- ..- 7
This is the first issue of The Hog Situation, one of a new series of
monthly conuodity reports to be released by the Bureau of Agricultural Econom-
ics. This report will be sent to those who formerly received World Hog and
Pork Prospects, the publication of which has been discontinued. The Hoe
Situation will provide current information on chl-r-,nes in the factors which
Affect the outlook for production and prices of hogs and hog products. Addi-
tional information on the hog situation in foreign countries will appear from
tim: to time in Foreign Crops and Markets which is issued weekly by this
Bureau. The present form of this report is experimental. Consents, criti-
cists and s'iuggstioins would be welcome.
Hog prices have declined since late .August in response to a seasonal in-
crease in marketing. The avera;- price per 100 pounds of packers and shippers
at Chicago in October at $9.55 per 100 pounds was 34 cents lower than in
September and 23 cents lower than in October a year :iro. The numb:cr of hogs
slaughtered under Federal inspection increased sharply from 2,400,000 in
Septoober to 3,500,000 in October. In October 1935 the number was 2,100,000.
This large increase was partly the result of the relatively large spring pig
crop of 1536 compared with that of 1935, and partly the result of early
narketings of spring pigs following the drought.
Hog prices in the 1936-37 hog-marketing year, which began October 1,
are expected to average about the same as or slightly higher than in 1935-36.
The seasonal price decline which started in late August apparently has about
ended, as prices are now showing a tendency to strengthen. From december to
March the price tr,.nd will probably be upward. Prices during the sunmer of
1937 are likely to average highLr than in the surfer of 1936.
The number of hogs available for slaughter in the marketing year be-
ginning October 1936 is expected to be larger than in either of the two pre-
ceding marketing years; and hog slaughter front October to December is expected
to represent a larger than usual jpr-portion of both the marketing year total
and the winter total (October to March). High prices of corn in relation to
hog prices following the drought have resulted in a fairly heavy liquidation
of breeding stock and a relatively small fall pig crop, and will probably
cause hog producers to raise fewer pigs in the sprin'L of 1937 than in the
spring of 1936. Hog slaughter supplies in the calendar year 1937, therefore,
probably will be smaller than in 1936, but probably not as snail as in 1935.
If corn crop prospects are about normal next year, however, a sharp increase
in breeding for the 1937 fall pig crop is likely.
Review of Recent Developments
The seasonal decline in hog prices which began in late August continued
thru'..,-h Septeber and October, but apparently has about reached its low point.
After continuing downward through October, prices recovered moderately in the
first week in November. The decline in the price of butcher hocs beginning
in late August was greater than the decline in the price of picking sows. As
a result, the margin betwcn these two classes has narrowed considerably since
August. .'..l11-finished butchers weighing from 220 to 250 pounds have been un-
usually scarce, and top prices have been paid for hogs weighing as much as 270
pounds. The discounts on light and unfinished hogs have contina.i-d heavy, re-
flecting further large markotings of these types. However, more of the light-
weight hogs showed desirable finish during the last half of October and early
Novouber than in previous weeks. Favorable fall pastures and the attractive
proniums on finished ho.; tended to reduce somewhat the liquidation of un-
finished hogs durin:- this period.
JHIt: marketi:i.- increased materially duriir. October. The total slau-ihter
under Federal inspection, 3,492,000 head, was 45 -rccnt larger than in
Septombcr and 64 percent larger than in October a y:'.r earlier. This increase
reflects both the larger sprir.- pig crop this year than last and the earlier
than usual markotings of spring :-ieis. The avern:'. weight of :ll hc.:s at the
seven leading markets for the uernth was 212 pounds cc..onared with ,--"' in
September and 242 in October 1935. The av.r..-e weight of butcher hotcs, al-
though at relatively low levels, has shown little change in recent weeks. The
sharp decrease in average weights for all ho,-: was the result of the decline
in the proportion of p-.~kirn sows and increase in tha proportion :f li.t
butcher h': L.- in the total supply. ,Aver-i weights are new below those for
the sane period of 1934, when feed .uF: lies were short because of drought
in thit year.
Wholesale prices of fresh perk declined sharply during October, and in
early November were at approximately the lowest levels of the year. Prices of
cured rr-.iduts also declined, with those of bacon r;-J.hir, new low levels for
1936. Prices of most other cured cuts and of lard, however, are still above
the low points re-ch*.i last sprinr-:.
St..ra- holding.' of pork and lard were reduced less than the usual
amount during October. Stocks of pork on November 1, tot3li': 352,000,C''
pounds, were about 3 percent less than those reported Cctober 1 and 14 percent
smaller than the 5-year average for that date, but were 46 percent larger
than the very small stocks on hand a year earlier. Lard stocks, tot-lin-
94,000,000 pounds, were about 8 percent smaller than those of October 1, but
were 129 percent greater than the very small stocks of a year earlier, and
32 percent larger than the 5-year average for November 1. In most years lard
stocks are reduced materially du'-i-n October. This fall, however, there has
been a -en-iency to reduce stocks rather slowly bec use of the prospect that
lard production later in the market i .' year will be relatively small.
E::r.'rtfs of perk totaled 4,'O1,-',',000 pounds in Septsmber, 31 percent less
than in August, 10 percent less than in ert :ember 1-i', and probably the smallest
for the month in more than 50 years. Most of the reduction was in cured pork
exports to the United Kin.m l., the largest part of the decline being in ship-
ments of hams and shoulders to that country. Lard e:-:r:prts in September, total-
ing 7,900,000 pounds, on the other hand were 28 percent laj ,er than the ship-
ments made in August and about 5 times as large as the unusually small ship-
ments of September a year earlier. The increase in exports of lard to Cuba
in Septe ber was greater tha;. the increase in exports to the United Kingdom.
In the 1935-36 hog marketir;.- year, which ended September 30, total exports of
pork were about 34 percent smaller than the total for the prec dil'r marketing
year, but were only about one-half as large as in other recent years. Lard
exports in l.:..-1-356 were nearly 29 percent smaller than a year earlier, .nd
Were the smallest in the 47 years of record.
Prospects Fa-vr Hog Feeders ;T. Have Grain
F-r farmers who have sufficient feed, the present is a distinctly fav-
orable time to carry brood sows on farms and to purchase additional feeder
pigs. The r -.-'rti movement of a considerable number of feeder pigs into the
South indicates that many Southern hog raisers are ta.li advantage of the
relatively plentiful feed supply available in thot area.
Hog prices are now t bout their seasonal low point end probably will
advance rather sharply from December to iMerch or Aprili Prices of corn, al-
though at a much higher level than a yecr earlier, =r, not likely to al'-.:' '_.
much further. The :i.;--. ,-rn price ratio, based on Chic..-. prices of ?-- and
corn, advanced from 8.8 in September to 9.0 in October. It is probable that
hog prices will advance relative to corn prices from December to March or Ap-
ril, thus causing the hr o-*.*-rn price ratio to become somewhat more favorable
for hog producers luring this period.
- 3 -
Slaughter supplies of h .,- in the 1936-37 season as a whole will be
larger than the unusually small supplies for either of the previous tv.o
marketir.g years, chiefly as a result of the 29 percent increase in the spring
pig of 1936 over that of l'?.E2. The seasonal distribution of slas.iht-r will
be much different from that of 19-5-36. Slaughter during the first 3 months,
October to December, will be a relatively large proportion of the total for
the marketing year. It will be much larger in numbers than in 17-, and may
not be r- tly different from 1934. Since the a.ver-E'. weight of ',o;0, marketed
may be at least as light as the extremely light r'.'r:-e for the same period in
1934, the total increase in the dressed weight of pork from i' W-236 to i1C,-37
probably will not be as great as the increase in hog numbers would indicate.
Slaughter in the second quarter, January to March, as in 13,4-35 and other
years of short corn crops and unfavorable hog-corn price ratios, probably will
be much smaller than in the first quarter. In most years of normal corn
supplies slaughter in the second quarter is about o-ial to that in the first
quarter of the marketing year.
Hog Prices Exoected to Rige Next S'sL',.-r
T-:, slaughter duri:-. the second half of the 193.-37 marketirn-7 year
(April to September 1937) will r-rr..er-r. t a smaller than usual pr.o.n.rt.ion of
the total l-,ufir.ter for the year, and will be somewhat smaller in numbers
than that of the corresponding period of 9:'.'-36. Marketing of butcher hogs
in the late summer of 1937 are likely to be quite small in view of the
prospective reduction in the 19J fall pig crop. If corn crop pr.sp:.-ts in
1937 are favorable, it is also probable that a l-ri'. r than usual proportion
of sows will be held for breeding, and the number marketed in the summer of
137 will be small. A further advance in hog prices at that time is 1. -:iy,
with prices probably reaching the r:i.'h;,:.t level for the I'36-37 marketinG year
in the late summer or early fall of 1937.
i,, number of h.:: available for slaughter in the second half of the
1936-37 marketing year will de'jend lar fly on the outcome of the 1936 fall
iig crop. The ho -f-eed price ratio durin- the sumner months ',-s such -s to
disco rc.;e breedirnj, and the extremely hi.h percentage cf so':.s in the in-
spected slaugLhter from July to Septembcr :' elected 7 very heavy liqui- tion
of brood cows, incl .i.i many origina-ll:, intended f:r fEll farrov:ing. Al-
t- -. the exact extent of the liquidation of bre,-ir.,- stock is not known, a
decrease in fall farrowl:.-, of from 10 to 20 percent from those of the f.ll
of 1935 now seems probable.
Av.'.-.r__ Hog Prices to be Su' ,-r~ r 'l Str:.r.:- D-::.-
1..- a'.':r.:.-e of h-'- prices for the 1936-37 marketi_:n year as a '.oI1
probably will not be -r -tly different from that of '-2'-. Al the
total live weight of inspected .,.- sl ig-lter is expected to be lar r ., the
effect of -rc increased supplies on :,' prices will be largely offset by the
further ': rprr,'.'c:e:' t in consumer -il- r.d now in prc:-:,oct. A str. :- s *"- e
demand for hog products, e-e.;-i~illy lard, is now evident. In 1'.'", r-1' -ed
s'opilios of beef cattle, as well as the stror;. demand for brood sows in the
spring, and summrner '-ill also be strengt'.r.i:.- factors.
One of the best indications available of consumer demand for hog
products is the volume of national income in the United States. National
income paid out for the year 1936 as a whole will probably total 10 to
12 percent greater' thlt -tr-i,5T 6 00,0,000 cctir. .t- "''t have been paid
out in 1935. A further increase of approximately 10 percent over 1936 is
expected for 1937. Little ch.n!l.'*i atiripated in-foreign demand for
American hog products. During'the past 12 r.ionths some foreign" cdutries
have relaxed to some extent their import restrictions for h:. products,
especially lard. The principal factor tending to prevent any large
increase in exports of American hog products in 1936-37 will not be the
foreign import restrictions, however, but the relatively high prices of
hog products in the United States. Foreign e:ch:n:. difficulties in
several European countries also will tend to prevent any lr._ imports of
American hog products.
Outlook Favorable for Increase in Hog Production
Although cl-iuhtcr sup:1lic:: of hogs in the current marketing year
are expected to be Ir'.r-cr than in either b6f the p' l f two years, they will
again be much below the average for the 5 marketing years preceding 1934-35.
This situation, together with the anticipated further improvement in con-
sumer demand for hog products in 1937, is favorable for increased hog
breeding operations and production. The hog-corn price ratio, nevertheless,
is now at a relatively low level, although it is expected to show some im-
provement in the next few months. 'Thile a current low cor"n-h;r.o price ratio
-ore- not necessarily mean that ho- :f:.iding will be unprofitable by the time
the sows have farrowed, the present unfavorable ratio and short feed
uppjli:-: is expected to cause a rather sharp reduction in the nu.Iber of
sows to farrow in the spring of 1937.
Thei ho .-corn price ratio probably will not continue thrc... .1._t, 1937
at the low level now prevailing. With .reduced rl Lu.i_-tor supplies after the
heavy winter run of hogs is over, hog prices are expected to advance rather
sharply, while corn prices are likely to weaken in the spring and surm.er of
1937 if corn crop prospects are favorable. By bre ,di:.- time for the 1937
fall pig crop, the hog-corn price ratio may be again quite favorable both
for hog feeding and for hog breeding. Under these conditions, a sharp
increase in fall farrowings in 1937 will take place. A further increase in
farrowings may be expected in 1939, provided another severe (.:.-m bht does
not occur. Even with increased pig crops in 1938 and 1939, it is not
expected that hog slaughter supplies will reach a volume comparable with
the average for the 5 years from 1929 to 1933 prior to 1940.
Hogs: Average price per 100 pounds of packer and shipper
purchases at Chicago and at seven leading markets, 1934-56.
A'. ........... .
Week ended 1/
Oct. 10 .........
Oct. 17 .........
Cct. 24 ..........
Oct. 31 .........
Nov. 7 ..........:
At Chic:' .i '
: At seven l;&-,inr.
I/ 1936; corre:..,r: i...i:- weeks in 1934 and 1935.
Number of hor slau--htered under Fedcr'.l inspection, by months,
1928-32 average, 19314-36
Sae : 1934 1935
: Million :*illion:Million
: :...1 : head : head :
Au;. ..........: 2.8 2.6 1.7 2.3
Sept. ........: 2.9 2.6 1.5 2.4
Oct. ..........: 3.7 3.5 2.1 3.5
Tot.!,_ ,.-.-_t : 9.4 __.... .7 5 __....__.5 8.2
Averae live :(cight of lhos and oerccntar.e of :.cr':ing so:E of total
pacler anId ohi per -purclhases at seven lea.dirn markets, 1934-b-
Au, .... .......:
S pt. ..... ......:
Week ond e: 1/
Oct. 10 ....
Oct. 17 ...
Oct. 24 ....
1 O t. I ...
I1 19;r.; ccrr ....
Aver.ae : Percentavge of
live wei ght : p.rcin oir nw
19 5. : 1936 '1 '
Pounds : Pouns : Prc.i:t : Percent
...: 225 24,
...: 217 247
...: 214 239
nd-li-" -we in 19-. and
219 28 18
214 24 14
210 20 11
I II I ..... II I
: Dollars :
Price of corn at Chicago and hog-corn price ratios, 1936
:Corn, price per
Month :bushel, lio. 3
.. -. -_ yellow Chicago
:_ Hog-corn price ratios, based on __
:Chicago :No.Cen.States : United States
prices s 1 farm pr-ices : farm prices
Bushels Bushels Bushels
Stocks of pork and
lard in cold storage on November 1, 1935,
:Nov. 1 Nov. 1, | Oct. 1, : Nov. 1,
Item : average 1935 1936 1936
1,000 1,000 1,000 1,000
pounds pounds pounds pounds
Total pork ......:
Lard ........... :
Pork products and lard: Exports from the United States, by marketing
years beginning in October, 1924-25 to 1935-36
Pork products 1/..
1929-30 to : 1934-35 : 1935-36
Million Million Million
pounds pounds pounds
1/ Includes bacon, hams and shoulders, f
-- -----------------~c~-- -----'-
!cd, and pickled pork.
LU J I'JV E S T ',CF F' "L C
S11 I I 1 2161 1018 I3 11 2 1 I1111111II
3 1262 08739 2139