The growth of the U.S. hog industry should continue through 2018, according to the USDA Hogs and Pigs report released late last month.
The overall inventory came in at 73.23 million pigs, up 2.4 percent from a year ago and about a half percent higher than pre-report estimates. Market hog numbers were up 2.5 percent from a year ago.
The USDA increased its estimate of spring hog marketings in the report, write economist Len Steiner and associates in the Daily Livestock Report for Dec. 26.
“The inventory of hogs weighing between 50 and 119 pounds was 18.546 million head, 2.5 percent higher than last year and 0.6 points higher than estimates,” they said. “These are hogs that will likely come to market between late February and early April. The inventory of pigs under 50 pounds, which should come to market in April and May, was 21.447 million head, 2.7 percent higher than a year ago.”
The breeding herd was up 1.1 percent from a year ago, very close to Steiner’s pre-report estimate. The breeding herd has grown by 7.3 percent since December 2013.
“Low feed costs, the ability to lock in a healthy profit for 2018 via the futures board, and the increase in processing capacity, have all contributed to the continued expansion of the breeding herd,” Steiner and company said.
“A larger breeding herd and incremental productivity improvements have bolstered overall hog supplies and should cause pork production next year to expand by another 3 percent.”
The growth in the breeding herd suggests larger pig crops in December-February and March-May.
“U.S. producer indications of the farrowing intentions have been consistently off the market for the last few quarters, and we think this has caused futures markets to question this part of the report,” Steiner and company said. “Farrowing intentions for the December-February period show an increase of 2.8 percent compared to a year ago, which is quite significant if it does materialize.”
Pigs saved per litter numbers also continue to rise, increasing by an average of 1.1 percent in each of the last six quarters.
“If this trend continues, we could see anywhere between 3.5 percent and 4 percent more pigs come to market in June-August,” Steiner and company said. “Farrowing intentions for March-May were up 2.3 percent from a year ago.
“Combined with a 1 percent increase in pigs per litter, this would imply a 3 percent increase in slaughter during September-November, all but assuring new all-time record hog supplies next fall.”