SOURCE: FARM DOC DAILY, UNIV. OF ILLINOIS, 6/29/20

Another all-time record hog inventory amidst the COVID-19 pandemic extends further downward pressure on prices. The USDA’s June Hogs and Pigs report places the June 1 inventory of all hogs and pigs at 79.6 million head, up 5.2% from a year ago, just above the upper range of pre-report expectations and well above the midpoint of 3.7% higher. The number is up 2.6% from last quarter, just surpassing the previous record set last December, and is in general a continuation of the industry expansion since mid-2014. The higher than expected inventory is driven by market hog inventory, which at 5.8% higher than a year ago, is also just above the anticipated range. Meanwhile, the breeding herd is down, but only 1.3%, compared to expectations of 1.8% lower. That is, producers’ response to low prices is not quite as strong as anticipated.

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