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Hogs and Pigs report shows producers expanding
Story Date: 3/29/2013
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Source: Rita Jane Gabbett, MEATINGPLACE, 3/2913
USDA’s quarterly Hogs and Pigs report showed U.S. hog farmers starting to expand production, a move that livestock analysts said will be bearish for hog prices.
United States inventory of all hogs and pigs on March 1, 2013 was 65.9 million head, up 1 percent from a year ago but down 1 percent from December 1, 2012.
Breeding inventory, at 5.83 million head, was up slightly from last year and up slightly from the previous quarter. Market hog inventory, at 60.1 million head, was up 2 percent from last year, but down 1 percent from last quarter.
While most of the report was in line with expectations, one number that did surprise analysts on a conference call after the report was the 2 percent increase in market hogs (and in particular those from 120 to 179 pounds). On average, analysts were expecting a less than 1 percent increase.
Livestock Marketing Information Center Director Jim Robb called it “a turning point” and an indication that producers are starting to expand, which he called “bearish” for hog prices. “Producers are taking a measured approach to expansion, but they are expanding,” he said.
Sterling Marketing President John Nalivka pointed out that even as pork producers have seen negative margins since last fall, corn prices have been lower than expected and hog prices have been higher than expected, fueling the optimism borne out in the increased numbers seen in this report.
USDA’s Grain Stocks and Prospective Plantings reports issued earlier on Thursday also pointed to lower corn prices as existing corn stocks and acreage expected to be planted to corn this year both came in higher than expected.
“We can expect larger [hog] numbers going into the second quarter and beyond,” said Victor Aideyan, senior risk management consultant at HISGRAIIN Commodities, noting the continued uptrend on pigs saved per litter as an indication that hog production efficiency continues to grow.
USDA reported the average pigs saved per litter were a record high 10.08 for the December-February period, compared to 9.97 last year.
The report put the December 2012-February 2013 pig crop, at 29.0 million head, up 2 percent from 2012. Sows farrowing during this period totaled 2.88 million head, up 1 percent from 2012. The sows that farrowed during this quarter represented 49 percent of the breeding herd.
Farrowing intentions
United States hog producers intend to have 2.96 million sows farrow during the March-May 2013 quarter, down 1 percent from the actual farrowings during the same period in 2012, but up 1 percent from 2011.
Intended farrowings for June-August 2013, at 2.91 million sows, are down 1 percent from 2012, and down 1 percent from 2011, according to the report.
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