U.S. hog numbers were down in last week’s USDA Hogs and Pigs report, but it’s probably too early to call this a trend.
Total inventory as of Dec. 1, 2020, was 77.5 million head, down 1% from a year ago. The breeding herd inventory was 6.28 million head, down 3% from the previous year and down 1% from the previous quarter.
Market hog numbers were also down 1%, as was the September-November pig crop.
“The information contained in the report indicated that the U.S. hog industry was smaller and less productive than it was a year earlier,” says Lee Schulz, Extension livestock marketing economist at Iowa State University. “Talk of supply contraction is premature. It remains to be seen if the slowdown in productivity continues going forward. Have you ever heard the saying, ‘two data points are not a trend?’”
In his analysis, Schulz says quarterly breeding herd numbers were down for the third consecutive quarter after 23 consecutive year-over-year increases.
“March 1, 2016, was the last time the breeding herd decreased compared to the year prior,” he says. While lower, the U.S. breeding herd at 6.276 million head is still the third largest Dec. 1 breeding herd in the last 22 years. Only 2018 and 2019 were higher. Between Dec. 1, 2010, and Dec. 1, 2020, U.S. hog producers have added almost 500,000 breeding animals.”
Schulz says there are several factors that could be causing producers to slow production.
“Many factors may be pushing some producers to pump the brakes. Others may be setting the cruise,” he says. “The speed and effectiveness of controlling the ongoing pandemic continues to be at the forefront of discussions and adds to market volatility.”
“We continue to come to grips with changing feed market conditions. Currency exchange rates and evolving trade policy are in flux. The list could continue. Could this all be enough to buck the upward secular trend in annual breeding herd numbers established in 2011? Maybe. But there is certainly potential for more stability in 2021 and beyond and opportunity for long-run growth.”