13 July 2022

2 minute read

By: Kyle Baldwin

Alton Kalo, Chief Economist with Steiner Consulting Group, discussed the results of the Hog and Pigs Report released June 30^th specifically addressing future supplies and pricing. Following are his insights:

Report Revisions

USDA revisions to estimates:

• March 1 market hog inventory revised up 410,000 head or 0.6%
• Pig crop for Sep-Nov was revised up by 411,000 head or 1.2%, attributed to better farrowings
• Pig crop for Dec-Feb was revised up by 123,000 head or 0.4%, attributed to higher farrowings

Report Analysis

Key numbers in the report:

• Total inventory is down 0.9% from last year
• Breeding herd is down 0.8% from last year
• Number of market hogs is down 0.9% from last year

Weekly hog slaughter trends:

• Experiencing usual seasonality: higher in the fall and winter, lower in the spring and summer
• Early to mid-July is 0.8% lower than last year; weekly slaughter is a little ahead of USDA estimates
• Mid-July through late August expected to have 0.7% lower supplies: about 10,000-15,000 head less than last year
• September through early October expected to have 0.6% lower supplies than last year
• Mid-October through late November expected to have 1.3% lower supplies: about 30,000-35,000 head less than last year

Hogs kept for breeding - quarterly inventory:

• Breeding herd dropped about 7% from December 1^st, 2019 to March 1^st, 2022 due to the pandemic and higher feed costs
• Breeding herd is about 1.1% lower than last year: about 6.168 million head
• About 70,000 head higher than in March 2022

Y/Y change of gilt retention:

• Implied gilt retention is about 5% lower than last year
• Actual gilt retention is 2.5% higher than last year due to herd liquidation, producers profiting February through May ($25/head) even with higher feed costs, and Proposition 12 coming into play

Ratio of Jun-Aug farrowings to June 1 inventory:

• June-August pig crop helps predict the expected supply in December-February
• Ratio of farrowing cases to breeding herd on June 1^st was 48.9%
• Farrowing intentions are lower compared to 2021

Productivity measures - pigs per litter:

• Producers can improve the productivity by farrowing better or having more pigs per litter
• Upward trend for the past 30 years in number of pigs saved per litter
• In the last couple years, the number of pigs saved per litter has flattened out due to the pandemic and ongoing pig disease pressure

Pig crop for Mar-May and expectations for Jun-Aug and Sep-Nov:

• March-May pig crop was down 1% from last year
• June-August pig crop is expected to be down 1.2% from last year
• September-November pig crop (will go to market next spring) is expected to be similar to last year