A.G. EDWARDS & SONS, INC.
One North Jefferson, St. Louis, Missouri
314-955-3050(March 9, 2000) HOGS: Weekly hog slaughter between late November and late January averaged about 4.7% under year-ago levels, which generally matched rates implied by the December 28 Hogs & Pigs report. However, the kill during the last five weeks has fallen just 2.2% below early 1999 rates. That presents a marked contrast to the December-January figures, and to the 3%-4% reductions implied by the report. The higher slaughter certainly seems to suggest hog supplies are unexpectedly plentiful, and raises questions about the spring-summer outlook. The surprisingly large kill also diverges sharply from general expectations for the spring hog supply. Disease problems have apparently struck the Iowa hog industry.
Coming on the heels of perceived North Carolina production problems stemming from Hurricane Floyd last September, a potential reduction in Iowa marketings could significantly reduce hog supplies. Two-thirds of the state's counties are battling the swine disease pseudorabies, which could force farmers to take drastic measures, up to and including eradication of the infected animals, to stem its spread. Producers may have recently accelerated marketings in anticipation of tougher regulations from the state Department of Agriculture. Given these circumstances, we cannot judge how this situation will impact spring prices. As a result, we are raising our close-only stop on our June/April hog spread to from 6.95 to 7.95.
Dan Vaught
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