Sort & Cull

The government's new assessment of swine population released Friday afternoon is either shockingly true or ridiculously false.

Color me voting for the latter.

Given the large number of wildcards dealt through much of the third quarter, crazy trump ranging from the porcine epidemic diarrhea virus (PEDv) to wildly swinging temperatures to the uncertain potential of corn production, I really thought the quarterly inventory was ripe for a surprise or two.

But there's a difference between "a surprise or two" and wall-to-wall bewilderment.

Of the 12 categories regularly survey, only two (i.e., June-August farrowing and market hog weighting 180 pounds plus) afforded a reasonable match between private estimates and official totals.

The kindest thing you can say about the enumerators is that they seemed to blunder on an equal opportunity basis, confounding bulls on one hand by confirming far more market hogs on finishing floors than anyone imagined, and perplexing bears on the other by denying any signs of herd expansion.

Although I find both examples of goofiness to be darn right hair-pulling, the report's blindness to the obvious impact of PEDv strikes me as the most egregious. After all, it's at least conceivable that the industry's severe equity drain over the last several years has kept producers reluctant and slow to pick up the flag of expansion.

But to essentially ignore the savaging impact of PED in the face of radical cuts in hog slaughter seen since late August makes me wonder exactly how many clerks at NASS are on (or should be on) furlough. Yes, hog kills have especially slumped since Sept. 1, the period outside the nominal reach of the new report.

Yet even if we assume that most of the 180-pound-plus market hogs are now dead, the Washington brain trust predicted that the next wave of ready barrows and gilts (i.e., 120-179 pounders) would total 1% more than 2012.

Over the last four weeks, federally inspected slaughter has totaled roughly 8.52 million, 8% below the same period last year. While market forces motivating country movement and slaughter from year to year never afford a perfect comparison, there's not enough difference between these apples and oranges to explain USDA's new screwy marketing schedule.

Did I mention that no one in lockup saw the need to trim the June 1 estimate of the spring pig crop by as much as a single tail (i.e., left unchanged at 30.11 million, even with Mar-May 2012)? Actually, that's cautious accounting compared with the 2% increase applied to the assessment of the summer pig crop.

Were all the gruesome anecdotes the trade has heard since midsummer nothing more than horrible examples of exaggeration, isolated death loss that belied the making of a new pigs per litter record for the summer period (i.e., 10.33)?

Something looks very wrong here. Contrasting the market hog breakdown with actual slaughter over the last six or more week, I'd say these numbers are just too goofy for belief.

Maybe packers will actually turn on the supply spigot next week and it will gush like a fire hydrant. If that happens, I may be required to drop a letter of apology to my friends at NASS, commending them for their mysterious vision.

For more of John's comments, visit http://feelofthemarket.com/…

(AG)

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