Monday’s USDA December hog inventory survey contained no big surprises. It said the Dec. 1 inventory of market hogs was up 0.5%; the breeding herd was up 0.1% and the inventory of all hogs and pigs was up 0.5% at the start of December. Growth, but not much.

The market hog inventory at the start of December was the largest for any December except December 2019 and 2020. The report pegged the Dec. 1 inventory of market hogs weighing 180 pounds and up at 99.5% of a year ago. The inventory of market hogs weighing 120-179 pounds was 99.4% of a year earlier. The inventory of market hogs weighing 50-119 pounds is up 1.4%, year-over-year. The inventory of hogs weighing less than 50 pounds is 101.2% of a year before. Thus, it looks like winter hog slaughter will be down roughly 0.5% and spring hog slaughter will be up about 1.3%.

Since Dec. 1 daily hog slaughter has been down 0.6%, a close match to the 99.5% inventory of heavy weight market hogs.

The December Hogs and Pigs Report said fall (Sep-Nov) pigs per litter averaged 11.99 head. That is up 2.2% year-over-year and a new record for any quarter. 

The September-November pig crop is estimated to be up 2.0% thanks to the combination of a 2.2% increase in pig per litter and a 0.2% decline in sows farrowed.

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The USDA report said fall farrowings were down 0.2% and said farrowing intentions for winter (Dec-Feb) were unchanged and intentions for spring (Mar-May) were up 1.4%.

Overall, the December Hogs and Pigs Report was probably a bit bearish since the market hog inventory was higher than the pre-release trade forecast. Farrowing intentions were also a bit more than trade forecasts.

The September-November pig crop (102.0%) looks a bit high relative to the light weight market hog inventory (101.3%).

The breeding herd (up 0.1%) matches reasonably well with the farrowings (up 0.4%).

Some downward revisions made to the June and September market hog inventories. The revisions made to the September report don’t match all that well with fall slaughter. September-November hog slaughter was down 0.1% but the revised inventory of heavy market hogs on Sept. 1 was up 0.7%.

The pre-release trade forecast predicted the December market hog inventory would be even with a year ago. USDA says it was up 0.5%.

The increase in spring farrowing intentions matches poorly with hog profits. Calculations by economists at Iowa State University put November profits for typical Iowa farrow-to-finish operations at $14.78 per hog sold. That was a whopping $42.48 better than a year ago. It was the most profitable November since 2014 and was the eighth consecutive month of black ink following seven consecutive months of losses.

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Historically, the percent change in hog slaughter correlates with hog profits 15 months earlier. The December market hog inventory implies hog slaughter this spring will be up 1.3%. Hog profit 15 months earlier were deep in red ink.  

Cost of production for Iowa hogs dropped in November to $81.91/cwt (carcass weight). That was the lowest level since December 2021. Declining corn prices are a major factor in the lower cost of producing hogs. 

USDA is predicting the average farm price of corn for the current marketing year at $4.10 per bushel. That is 45 cents lower than last year and $2.44 lower than two years ago. The five corn futures contracts for 2025 are currently trading at $4.44 per bushel plus or minus 10 cents.

The average liveweight price for 51-52% lean hogs in November was $63.71/cwt. That was $2.19 cents higher than the month before and $9.79 higher than a year ago. Hog prices in recent days have been less favorable.

Retail pork prices have been high this year. The average retail price of pork in November was $4.949 per pound. That was 2.9 cents higher than the month before and 6.9 cents higher than a year ago.

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As is typical at this time of year, the lean hog futures contracts indicate hog prices will put in an early-winter low then rally to a summer high.  What is not so common is that the nearby February, April, May and June hog contracts for 2025 are trading well above their deferred counterparts for 2026. 

Hog slaughter is going to end 2024 slightly higher than last year. Next year look for a 1-2% increase in hog slaughter. Changes in slaughter levels are not likely to be the dominate force in 2025 hog prices. I expect fluctuation in demand to play a larger than normal role.

Through October U.S. pork exports were up 4.5% (thanks largely to Mexico, South Korea and Colombia) and pork imports were up 1.1% (due largely to more pork coming in from Brazil and Denmark).

Through October, U.S. pork imports equaled 4.1% of pork production and pork exports equaled 25.2% of U.S. production.

Barrow and gilt slaughter weights are running about 1 pound heavier than last year. Through November hog slaughter is up 1.5% and because of heavier weights pork production is up 2.0%.