Larger U.S. hog herd expected in USDA report

By Bob Burgdorfer

CHICAGO (Reuters) - There are more hogs on U.S. farms this year due to producers expanding herds after years of profits and to struggling Canadian producers shipping more hogs to the United States, livestock analysts said.

The United States Agriculture Department will release its quarterly hog report at 2 p.m. CST (2000 GMT) on Thursday, and analysts surveyed by Reuters unanimously expect it to show more hogs than a year ago.

Much of the increase will be due to U.S. producers responding to years of profits by expanding herds, but also analysts widely expect USDA to revise upward hog numbers from previous reports.

Analysts on average expect USDA to show the December 1 hog herd at 103.5 percent of a year ago, with estimates ranging from 102.7 to 104.8; the breeding herd at 101.1 percent, from a range of 100.4 to 101.8; and the market hog supply at 103.7, from a range of 102.9 to 105.3.

"We are still expanding," Ron Plain, University of Missouri agricultural economist, said of the larger herd.

Hog producers have had several profitable years, and as a result they built barns and added more hogs, analysts said.

Also, high feed prices have hurt the Canadian hog industry and it has been sending more hogs to the United States.

Year-to-date to December 15, Canada shipped nearly 2.689 million slaughter hogs to the United States, up 22 percent from the same period in 2006. Also, it shipped 6.18 million feeder pigs, up 9.6 percent from the same period in 2006.

REVISIONS EXPECTED

"The huge increase in hog slaughter experienced this autumn will almost surely force the USDA to make substantial upward revisions to the numbers on the last two to three reports," Dan Vaught, A.G. Edwards livestock analyst, said in a report.

Previously USDA put September 1 hog supply at 103 percent of a year earlier, but some analysts said recent slaughter data indicates that was about 3 percent too low.

"USDA is going to make some major upward revisions in their old numbers to get them in line with what slaughter has actually been," said Plain. "Three percent is a huge miss, so there is going to be upward revisions."

On average, hog prices are no longer profitable for producers but Plain said it may be late in 2008 before producers stop expanding.

"We don't change plans on a dime, the industry has to soak up losses for a while before changing plans," he said.

(Reporting by Bob Burgdorfer, editing by Matthew Lewis)