The U.S. inventory of all hogs and pigs on Sept. 1 was 77.7 million head, up 3.4% from last year and 3% from last quarter, according to the quarterly Hogs and Pigs Report released by the USDA Friday afternoon. The pre-report survey average was plus-2.9%, so a bit larger than what analysts had expected, however this is the highest Sept. 1 inventory of all hogs and pigs since the estimates began in 1988. 

Breeding inventory, at 6.43 million head, was up 1.6% from last year, and up slightly from the previous quarter. This was very close to analysts’ pre-report estimates of 1.3%.

Market hog inventory was another record at 71.2 million head, up 3.5% from last year, and up 3% from last quarter. Analysts had thought that number would be up 3%. This is also the highest Sept. 1 market hog inventory since estimates began in 1988.

“Plenty of pork, plenty of slaughter capacity, but somebody’s got to eat this stuff and what we’re finding is that currently we’re estimating the next year in 2020, we’re going to have to export about 26.2% of all the pork production in the country,” says Len Steiner, president of Steiner Consulting Group. “If we fall short of that? We will probably have more pork than we can consume at reasonable prices in the United States, and certainly you know, the bet is on China. If China comes in here for big numbers, our 26.2 maybe too light, in which case, you know, hog prices will be heading higher. But that’s an awful big bet for this industry on how quickly the export market is going to continue to develop.”

For the 50-pound weight category, there were 22.616 million, 1.9% larger than last year, and close to the analyst average estimate of plus-2.1%. For 50 to 119 pounds, there were 20.89 million head, 2.4% larger than one year ago. Analysts had expected that number to be up 2.8%. In the 120- to 179 pound-range, there were 14.81 4 million head, 5.3% more than last year and somewhat larger than analysts’ average estimate of plus 3.6%. For the 180 pounds and over, there were 12.969 million head, up 6.4% from a year ago, and again, a somewhat larger number than the average analyst expectation of plus-4.3%.

The June-August 2019 pig crop, at 35.3 million head, was up 3% from 2018. This is the largest June-August pig crop since estimates began in 1970. Sows farrowing during this period totaled 3.18 million head, down 1% from 2018. The sows farrowed during this quarter represented 50% of the breeding herd. 

The average pigs saved per litter was a record high of 11.11, 3.76% larger than last year for the June-August period. Analysts had expected that number to be up 2.4%.

U.S. hog producers intend to have 3.16 million sows farrow during the September-November 2019 quarter, down 1% from the actual farrowings during the same period in 2018. Intended farrowings for December 2019-February 2020, at 3.11 million sows, are down slightly from 2019, but up 2% from 2018.

“The most pronounced number to me that jumps out on this one is pigs saved per litter, a new record of 11.11. I find this is consistent with the anecdotal information that we pick up from our producers as well as genetic companies in the barns, we are continuing to save more and more pigs, and our productivity and the proficiency of our producers is being exposed in here,” says Joseph Kerns, president of Kerns and Associates. “We’ve got some very dynamic forces at play right now, specifically with what the exports look like and the promise of what China is bringing. The optimism that we have on the board is certainly not going to discourage very many folks from continuing to produce and what the prospects of tomorrow brings.”

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 48% of the total U.S. hog inventory, unchanged from the previous year.