Finisher Pigs

DES MOINES, Iowa – There appears to be optimism in the pork industry as the U.S. pork herd continues to expand. Producers continue to break records in inventory numbers and management practices, but that optimism is cautious as producers wait on the development of new global pork markets.

“We're looking at a record market hog inventory, so there’s lots of hogs out there and that's going to give us record slaughter,” said Ron Plain, professor emeritus at the University of Missouri, during the quarterly ag media teleconference call sponsored by the Pork Checkoff and hosted by the National Pork Board.

According to the USDA Quarterly Hogs and Pigs Inventory Report, released on Sept. 27, there are 12.969 million head of market hogs in the weight category of over 180 pounds, as of Sept. 1. This is a 6.4 percent increase from one year ago.

That many hogs ready for harvest in September is breaking slaughter records for the nation.

“The official total for the week ending Sept. 13 is 2,632,118 hogs harvested,” said Plain. “The second biggest week after the week ending Dec. 21, 2018.”

Total hog inventory for the country continues to rise. The total number of hogs and pigs as of Sept. 1 is at a record breaking 77.678 million head, up 3.4 percent from one year ago.

The breeding herd is up 1.6 percent from last year at 6.431 million head.

The next record-breaking number, which has consistently improved over the past several reports, is the number of pigs saved per litter. The June-August pigs saved per litter was 11.11 pigs, up 3.6 percent from last year.

“We are in a growing industry. I think this is a healthy problem that we have. The fact that we continue to raise more animals is not an accident and I think it's a sign of some optimism within the industry,” said Joe Kerns, president of Kerns and Associates.

Kerns goes on to explain that this number of 11.11 pigs per litter is consistent with what he and his company is hearing from the producers that they work with.

“It is genetic companies and our practices out in the barns that continue to save more and more pigs. Our productivity and the proficiency of our producers is being exposed here,” he said.

Raising more pigs and producing more pork is only part of the industry. There needs to be demand for the extra pork that is being added into the market.

Domestic demand for pork has remained relatively constant and is unlikely to take a sudden surge upward. The demand will need to come from export markets.

“We're estimating the next year, in 2020, we're going to have to export about 26.2 percent of all the pork production in the country,” said Lynn Steiner, president of the Steiner Consulting Group. “If we fall short of that, we probably will have more pork than we can consume at reasonable prices in the United States.”

All eyes are focused on China to be the buyer for the added pork being produced.

Pork is a staple in the Chinese diet and their hog numbers are rapidly declining due to the spread of African swine fever. Until they can rebuild their herd, the Chinese people will be in need of a protein source in their diets.

“The bet is on China, and if they comes in here for big numbers, our 26.2 percent may be too light, in which case, hog prices will be getting higher,” said Steiner. “But that’s an awful big bet for this industry on how quickly the export market is going to continue to develop.”

Trade talks are in the works with China, and the latest news from the White House was that they were going well. As their pork supply starts to shrink, that might force the Chinese to hasten a trade deal or the Chinese people may be forced to find alternatives to pork in their diet.