A thank you, an introduction and a deep diveA thank you, an introduction and a deep dive
More hogs than anticipated in the heaviest market hog weight categories would be expected to pressure near-term futures contracts lower; significant downward pressure did not occur.

As Dr. Steve Meyer explained in his September column, I will be taking over his spot writing for National Hog Farmer. I do not take this responsibility lightly. Dr. Meyer had a long, storied career and a big part of that was educating readers about the latest developments and key issues in hog and pork markets. I am honored to continue on that path. I sincerely thank Dr. Meyer for mentoring me and all that he has taught us over the years.
For my inaugural article, I will discuss the latest Quarterly Hogs and Pigs report. Agreed, the report USDA’s National Agricultural Statistics Service released Sept. 26 is already old news. Rather than re-massaging the numbers, I will dive deeper into the report and USDA’s process for estimating inventories and how it makes revisions. Hopefully insight on how inconsistencies occur will aid in interpreting future reports.
USDA begins working on a report before surveying producers for data. The hog statistician at NASS headquarters, livestock branch chief, livestock section head and a methods branch representative determine whether hog slaughter and balance sheet data evolving since earlier reports justify revisions in previous reports. In March, June and September NASS may revise estimates for the previous three quarters. The December report may contain revisions for up to seven previous quarters.
NASS asks producers to provide inventories as of the first of the survey month
For each Quarterly Hogs and Pigs report, NASS surveys producers during the first half of the month in which the report is released. Experienced staff in NASS regional field offices process, edit and review the raw data. They prepare summaries and formulate recommendations, which they submit to the headquarters hog statistician who generates preliminary estimates using a statistical model. The statistician delivers these preliminary estimates to a pre-board panel consisting of livestock statisticians at NASS headquarters.
Lightweight pigs in one report become heavyweight market hogs in the next report. The pre-board panel looks for inconsistencies between current survey data and estimates for lightweight categories reported three months earlier. The panel next looks at a comparison of the model-based numbers with the survey numbers for totals and by various inventory categories. They use this information to develop pre-board scenarios. One scenario is based on the model-based estimates. Another is to project weight group inventories by expected growth of the previous quarter’s small pigs to heavier weight categories.
The hog statistician presents the pre-board scenarios and balance sheets to the Agricultural Statistics Board. In addition to the hog statistician, this board includes the NASS statistics division director, livestock branch chief, livestock section head, methods branch representative, survey administration representative and two or three regional field office representatives. After a discussion, all board members enter their targets into a model. The hog statistician then pulls up a summary of everyone’s recommended targets. A roundtable discussion ensues about why board members chose their national targets, and then the board establishes a consensus on the national targets. Next, the headquarters statistician and regional field office representatives set the state-level estimates using a top-down approach.
How deviations from expectations can move futures prices
A few days before USDA releases a Quarterly Hogs and Pigs report, market analysts, traders and others anticipate the numbers that NASS will publish. Analysts use the relationship of inventories to other reported data and a general understanding of current market conditions to make pre-report estimates. Analysts typically use prior Quarterly Hogs and Pigs reports, especially the most recent one, as a reference point.
News services and others gather and report pre-report trade estimates. The calculated average reflects the aggregate trade analysts’ opinion of what NASS estimates will be in the report. These supply expectations, more specifically changes in supply expectations, drive market price changes.
If the market hog inventory number NASS publishes is larger than the average pre-report estimate, Lean Hog futures prices would be expected to decline because the supply of market hogs is greater than trade analysts expected. Weight groups go to slaughter over different time periods. So nearby and deferred futures prices will react differently according to supply changes in each weight category.
The September Hogs and Pigs report showed that the inventory of hogs weighing 180 pounds and over was up 4.8% compared to Sept. 1, 2023 while hogs weighing 120 to 179 pounds were up 3.5%. Both NASS estimates were much larger than pre-report expectations.
All else equal, more hogs than expected in the heaviest two market hog weight categories would be expected to pressure near-term futures contracts lower. Significant downward pressure on prices did not occur following the release of the September report.
Over time hog slaughter provides ground truth for inventory estimates
Hogs weighing 180 pounds and over on Sept. 1 come to market in September through late October.
At the time the headquarters hog statistician delivered the first run of the model to the pre-board panel, only about two weeks of estimated, or preliminary, federally inspected hog slaughter data were available. Those data showed that for the week ending Sept. 7, hog slaughter was 2,327,000 head, up 3.6% from the same week in 2023. Hog slaughter the week ending Sept. 14 was 2,565,000 head, up 1.2% from 2023. USDA considers these data, but does not let these data influence how they view survey estimates.
More hog slaughter data was available by the time the Hogs and Pigs report was released on Sept. 26, 2024. It showed hog slaughter was up 0.8% since Sept. 1.
Comparing to the average of pre-report estimates
On average, the seven analysts polled by Expana expected the heaviest weight group inventory up 1.7% compared to 2023. That was quite a bit below USDA's estimate of up 4.8%.
Analysts, on average, expected the inventory of hogs weighing 120 to 179 pounds to be up 1.4%, well below the NASS estimate of up 3.5%. Those hogs are intended to be marketed late October through late November.
What could explain the inconsistencies? An easy answer is trade analysts had more time and slaughter data available to formulate their estimates than NASS had when it made its estimates. Sometimes we can search long and hard for an answer, and never find one.
Occam’s razor, also known as the law of parsimony, is a philosophical rule for shaving off unlikely explanations. Essentially, when faced with competing explanations for the same phenomenon, the simplest is usually the correct one. In this case NASS will need to go back and revise the 180 pound and over category and likely the 120 to 179 pound category. Time will tell if evolving hog slaughter and balance sheet data will justify revising the lightest two market weight categories of the September report.
NASS will have three opportunities to revise Sept. 1, 2024 inventory estimates. First in December, then in March 2025 and lastly in June 2025. The largest changes, if any, usually occur in the first revision. The second and third reviews usually result in minimal revisions.
Unfortunately, revisions will make analysts’ jobs harder when making pre-report estimates because the denominator will change for making quarter-ago and year-ago comparisons.
Historical track record is still pretty good
On Sept. 16, USDA NASS published its annual Livestock Historical Track Records report. It compares first and final inventory estimates for Dec. 1 inventories of all hogs and pigs, breeding hogs and pigs and market hogs and pigs. From 1980 to 2023, USDA revised up the final estimate from the first estimate for the Dec. 1 market hog inventory 29 times. They revised it down 15 times. The average over these 44 years was an upward revision of 256,280 head or 0.5%. That’s pretty good.
Think of this as a report card for NASS. I’m not sure about you, but I wouldn’t want any of my report cards being made public. But this is part of NASS’s mission in providing timely, accurate and useful statistics in service to U.S. agriculture. Knowing historical track records is important. It helps instill confidence and gives a possible margin for error between first estimates and final estimates that take into account all subsequent information.

Data source: USDA-NASS.
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