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U.S. Hog-Breeding Herd Grows 0.6% as Profit Prompts Expansion

The U.S. hog-breeding herd on Sept. 1 was 0.6 percent bigger than a year earlier, as profitability prospects encouraged producers to expand.

About 5.806 million sows were being held back for breeding as the month began, up from 5.77 million on Sept. 1, 2010, the U.S. Department of Agriculture said today in a quarterly report. Nine analysts in a Bloomberg News survey forecast a 0.1 percent increase, on average. The breeding herd was little changed from 5.803 million at the end of the previous quarter.

Producers made an average profit of $15 for each animal sold from June through August, said Rich Nelson, the director of research at McHenry, Illinois-based Allendale Inc. In the year-earlier period, the figure was $28, he said.

Wholesale pork prices, up 25 percent this year, reached $1.1019 a pound on Aug. 8, the highest since at least October 1997, USDA data show. Retail pork averaged $3.512 a pound in August, a record high, and spot-market hogs reached $1.0408 a pound on Aug. 4, the highest since at least April 2003, government data show.

“Record hog and pork prices encouraged farmers to maintain their breeding herds at relatively high levels,” Dan Vaught, the owner of Vaught Futures Insights in Altus, Arkansas, said in an e-mail before the report.

The total hog herd was 1 percent bigger on Sept. 1 at 66.599 million, compared with 65.971 million a year earlier, the USDA said. Analysts expected a 0.7 percent gain.

Hog futures for December settlement fell 0.125 cent to 83.35 cents a pound at 12:51 p.m. on the Chicago Mercantile Exchange. The USDA released its report after markets closed in Chicago.

The inventory of hogs to be sold for slaughter was 60.793 million, up 1 percent from 60.201 million a year earlier, the USDA said. Analysts expected a 0.7 percent increase.

Sows averaged a record 10.03 pigs per litter during the three months ended Aug. 31, up from 9.81 in the same period a year earlier, the USDA said.

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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