After last week's USDA Quarterly Hogs and Pigs report, USDA Livestock Analyst Shayle Shagam says its plain and simple – pork producers are very much in a contractionary mode. Both breeding and market hog inventories were down 1% and the Sept. 1 inventory of all U.S. hogs and pigs, at 73.8 million head, was also 1% below Sept. 1 of last year.

"During June-August producers farrowed just over 3 million sows, which was about a percent below a year ago, and indicated intentions to farrow just under 3 million head in September-November, about 2.5% below a year ago," Shagam says.

For the upcoming winter quarter, producers have told USDA they intend to farrow 2.9 million head in December-February, about six tenths of a percent below a year ago.

Shagam says several factors could be at play here.

"The current state of availability of corn, corn prices. The fact that we have seen hog prices come down, there are probably concerns about being able to break even," Shagam says. "There's a lot of uncertainty over the economy, what that might imply for pork demand going forward."

However, Shagam says in the hog business, it's a lot easier to change direction than it is for cattle folks. As far as lower farrowing intentions, he says "intentions are just that, they are intentions."

"In some cases they don't represent sows that have been bred yet and, you know, producers can change their minds and decide to begin to expand," Shagam says.

In August, hogs were averaging about $88 a hundredweight, Shagam says. This past week hogs were down into the high $60s, putting pressure on producers to either cut costs to save money or cut production to try to get prices back up, or both.

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