Hog numbers increased by more than 3% from year-ago numbers, according to the USDA’s Hogs and Pigs report released late last week.
The overall inventory on Sept. 1 was listed at 77.678 million head, up 3.4% from 2018 and a half percent higher than pre-report forecasts. The third quarter pig crop was also slightly above projections.
“This increase was largely driven by increases in pigs per litter as opposed to increases in farrowings by producers and continues a long trend of increases in the pigs per letter over time,” says Michael Nepveux, economist with the American Farm Bureau Federation.
“Looking forward, increased potential profitability for producers as a result of African swine fever (ASF) in Southeast Asia is likely to continue to incentivize expansion.”
The USDA estimated market hog inventory at 71.248 million head, up 3.4% from a year ago. Pigs kept for breeding was up 1.6% from 2018.
“Every single report since March 2015 has hit a quarterly record in terms of the total hogs and pigs inventory, with eight of those quarterly reports hitting an all-time record across all quarters. As a result of this trend, we are expecting record pork production in 2019 as well,” Nepveux says in his analysis.
Pork’s export strength continues despite some barriers in place, he says.
“Current trade tensions had been somewhat standing in the way of pork exports, but even with a tariff of over 60% on U.S. pork going into China, we have seen a dramatic increase in exports into the country,” Nepveux says, adding the U.S. share of the Chinese pork market remains relatively small.
He says the USDA projected lower farrowing intentions in the June report. Analysts, on the other hand, expected producers would farrow more pigs.
Nepveux says the potential of increased profits in the wake of Asia’s ASF outbreak helped producers boost farrowings.
“This quarter’s pig crop was slightly above analysts’ expectations at 35.306 million animals, an increase of 2.9%,” he says. “Analysts had been expecting the number of pigs born during the June-August quarter to increase by 2.4%.”
The report indicates producers intend to farrow just under 1% more sows in September-November.