Although hog prices have been disappointing, pork prices at the retail level have been very strong.

Ron Plain, Professor Emeritus

March 25, 2024

4 Min Read
National Pork Board

The results of USDA’s March hog inventory survey will come out this coming Thursday. I expect it to show a slightly larger swine herd than at this time last year. I expect the market hog inventory to be up 0.6%. This should keep pressure on hog prices. I expect the report to show farrowing intentions for the spring and summer to be down a bit over 1%.  

The pigs per litter number is tough to forecast. Last spring March-May pigs per litter was a record 11.36 head. That was up 3.27% year-over-year. The record was broken the next quarter when June-August pigs per litter was 11.61 head. A new record of 11.66 pigs per litter was set in the fall.

For nine consecutive quarters starting in December 2020, pigs per litter had an average increase of 0.1%. For the next three quarters it averaged an increase of 3.8%. Pigs per litter is normally the lowest during the winter quarter. I’m going with a forecast of 11.37 pigs per litter for December-February, an increase of 3.1% from last winter but down 2.5% from the previous quarter.

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The large financial losses hog producers suffered in 2023 is the primary reason for the declining swine herd. Each month economists at Iowa State University estimate costs and income for Iowa hog farms. Their latest calculations put the loss for hogs marketed in February at $17.85 per head. That was the sixth consecutive month with red ink.

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Iowa State’s calculated cost of production for hogs marketed in February was $66.63/cwt (liveweight) or $88.84/cwt (carcass weight). February’s cost of production was down for the 10th consecutive month. The reason for the decline in cost of production is falling feed costs. Corn prices started 2023 above $7 per bushel and ended the year under $5 per bushel.

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During the first quarter of 2024 corn prices average roughly $2.30 per bushel below year-ago levels. Corn futures contracts for the next two years are trading between $4 and $5 per bushel.

Sow slaughter has increased in recent weeks. Over the most recent seven weeks with data, sow slaughter was up 9% year-over-year. During this same period barrow and gilt slaughter was up less than 4%. Increased sow slaughter in February and March would imply fewer farrowings in June and July; provided of course, gilt retention doesn’t increase.

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It is likely USDA’s March report will make some upward revisions to the December hog survey estimates. Hog slaughter during December-February was up 3.7%. The market hog inventory on Dec. 1 implied winter hog slaughter would be up 1.2%. That is not a big miss but is enough to justify some revisions. Since the first of March hog slaughter has been down 0.5%. The June Hogs and Pigs Report indicated slaughter would be down 0.5%. No need for any revision there. 

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As it does most years, the peak in 2023 hog prices occurred during the summer. The negotiated base carcass price for market hogs reached $106/cwt during late July. Last week negotiated live hog prices averaged $80/cwt, roughly the same as a year ago. As the chart shows hog prices often take a dip in April.

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USDA is predicting 2024 pork production at 27.91 billion pounds (up 2.2% year-over-year) and live hog price at $61/cwt up 4.1% compared to 2023. Higher pork production and higher hog prices aren’t the usual combination.

The average liveweight price for 51-52% lean hogs in February was $55.24/cwt. This was 1.8% higher than a year ago and the highest since October averaged $58.08/cwt. 

The pork supply depends not only how many hogs we slaughter, but also on what those hogs weigh. The long-term trend has slaughter weights increasing by an average of one pound per year. Weights fell short last year and may do so again in 2024. Last year hog slaughter was up 2.1% but due to lighter slaughter weights pork production was only up 1.1%. The light weights were due in part to the financial losses producers suffered in 2023. Why sell bigger hogs when you are losing money on every pound you market?

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Four years ago, when China was struggling with an outbreak of foot-and-mouth disease, they were by far the largest foreign buyer of U.S. pork. But now, their purchases are back to pre-outbreak levels. U.S. pork exports are increasing thanks to Mexico. Most months Mexico buys more than 200 million pounds of U.S. pork and often twice as much as Japan who is the second biggest buyer.

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Although hog prices have been disappointing, pork prices at the retail level have been very strong. During January and February retail pork prices were little changed from last year but were 18% above the 5-year average for the first two months of the year.

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About the Author(s)

Ron Plain

Professor Emeritus, University of Missouri

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