Hogs & Pigs Report Foreshadows Expansion on Horizon

Lora Berg 1, Editor

December 23, 2014

3 Min Read
Hogs & Pigs Report Foreshadows Expansion on Horizon

The inventory of all hogs and pigs in the United States on Dec. 1, 2014, was 66.1 million head, according to the Dec. 23, 2014, U.S. Department of Agriculture Quarterly Hogs & Pigs Report. Inventory was up 2% from Dec. 1, 2013, and up 1% from Sept. 1, 2014.

In a Pork Checkoff-sponsored news conference following the report’s release, a panel of agricultural economists noted that productivity is improving as the industry moves toward recovery from the porcine epidemic diarrhea virus (PEDV) outbreak that began in 2013.

Breeding inventory, at 5.97 million head, was up 4% from last year, and up 1% from the previous quarter.

Market hog inventory, at 60.1 million head, was up 2% from last year, and up 1% from last quarter.

The September-November 2014 pig crop, at 29.4 million head, was up 4% from 2013. Sows farrowing during this period totaled 2.87 million head, up 3% from 2013. The sows farrowed during this quarter represented 48% of the breeding herd.

The average pigs saved per litter was a record high 10.23 for the September-November period, compared to 10.16 last year. Pigs saved per litter by size of operation ranged from 8.10 for operations with 1-99 hogs and pigs to 10.30 for operations with more than 5,000 hogs and pigs.

“One thing I wanted to highlight is what the report indicates for supplies further down the road in late summer, fall and then 2016,” said Altin Kalo, Steiner Consulting Group, Manchester, NH. “We’ve had a pretty significant increase in the breeding herd over the last couple of quarters. For the previous quarter the breeding herd increased 1.8% from the previous year. For this quarter as of Dec. 1, the breeding herd was pegged at 3.7% higher than a year ago. You have to go back 15 years or so to see that kind of increase in the breeding herd.”

Kalo continued, “There’s a reason why the breeding herd in the U.S. hasn’t been increasing over the years. It’s because improving productivity in terms of pigs per litter meant you didn’t have to do that. The last year we had a pretty devastating impact from PEDV and pretty strong margins for producers so the incentive is there not only to improve production through productivity, but also by bringing more sows into production and it looks like producers are doing that.”

Lee Schulz, assistant professor in the Department of Agricultural Economics, Iowa State University, Ames, IA, said given the reported farrowing intentions moving forward, it seems the industry is signaling growth. “No matter what number you are using for commensurate pigs per litter, even a conservative estimate puts us at or above record pig crops in these next two quarters,” he explained. “I want to highlight the real impetus of growth we’ve seen. We’ve seen historic returns in 2014 and if you project out returns into 2015, it looks to be in the black. I think that’s really been that trigger for expansion. In the last two quarters we’ve added about 100,000 hogs. We’re really on that pending growth.”

Kalo sounded a note of caution in the event that pork industry growth continues at the projected rate. “In our view it is somewhat of a warning for the industry that the current growth in the breeding herd, coupled with the improvement in productivity, might lead to an oversupply in hogs in late 2015, and more likely in 2016. At some point we might actually start bumping against the slaughter capacity that’s in place. It takes years to develop slaughter capacity and this thing is growing a lot faster than we can bring slaughter capacity online.”

Read more about the Hogs & Pigs Report numbers in a PDF form at the USDA website here.

About the Author(s)

Lora Berg 1

Editor, National Hog Farmer

Lora is the editor of National Hog Farmer. She joined the National Hog Farmer editorial team in 1993, served as associate editor, managing editor, contributing editor, and digital editor before being named to the editor position in 2013. She has written and produced electronic newsletters for Farm Industry News, Hay & Forage Grower and BEEF magazines. She was also the founding editor of the Nutrient Management e-newsletter.

Lora grew up on a purebred Berkshire operation in southeastern South Dakota and promoted pork both as the state’s Pork Industry Queen and as an intern with the South Dakota Pork Producers Council. Lora earned her bachelor’s and master’s degrees from South Dakota State University in agricultural journalism and mass communications. She has served as communications specialist for the National Live Stock and Meat Board and as director of communications for the University of Minnesota College of Agricultural, Food and Environmental Sciences. During her career, Lora earned the Story of the Year award from the American Agricultural Editors’ Association and bronze award at the national level in the American Society of Business Publication Editors’ competition. She is passionate about providing information to support National Hog Farmer's pork producer readers through 29 electronic newsletter issues per month, the monthly magazine and nationalhogfarmer.com website.

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