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Hogs and pigs report seen as market-friendly

USDA numbers come in close to analysts’ pre-report estimates.

USDA’s quarterly Hogs and Pigs report offered no real surprises to market experts, pegging the U.S. inventory of all hogs and pigs on Dec. 1 at 74.55 million head. This was up 1.9% from Dec. 1, 2017, but down 1% from Sept. 1 of this year. Steve Meyer, Kerns and Associates, says the pre-report estimates came in up 2.7%, “so this is a little smaller than analysts had expected.”

Breeding inventory was set by USDA at 6.326 million head, up 2.4% from last year, under the 2.8% increase predicted by analysts. The USDA report came in slightly lower from the previous quarter. The marketing herd, coming in at 68.225 million head, up just shy of 2% from last year, but analysts estimated that number to be up 2.6%, for a 0.7% discrepancy.

The largest discrepancy between analysts’ projections and the USDA report came in the under-50-pounds category where the report pegged the number at 21.599 million head, up 0.9%, as where analysts predicted that to be up 2.5%. “That is the only number in the report that over a 1% difference than what analysts had expected it to be,” Meyer says.

Altin Kalo, analyst with the Steiner Consulting Group in Manchester, N.H., sees this report as friendly to the market, “just because a lot of the key numbers were under what the analysts were expecting.”

Focusing on the breeding herd, which USDA says is 2.4% above a year ago, but lower than analysts’ expectations and lower than the September breeding herd, he says the gilts retained is lower by about 3%. “It is hard to say if this will be the trend moving forward, whether that reflects some of the challenges that producers have faced” with weather at time of breeding or trade issues.

USDA reports the sows farrowing during this period totaled 3.16 million head, up 2% from 2017. The sows farrowed during this quarter represented 50% of the breeding herd. The number of average pigs saved per litter continues to creep up, reaching a record high of 10.76 for the September-November period, compared to 10.74 last year.

American pig farmers intend to have 3.11 million sows farrow during the December-February quarter, up 2% from the actual farrowings during the same period in 2018, and up 4% from 2017. Intended farrowings for March-May 2019, at 3.15 million sows, are up 2% from 2018, and up 4% from a year ago.

Kalo suggests watching these farrowing numbers, as they are higher than what he had expected to see moving forward.

Bob Brown, Independent Analysts of Edmond, Okla., and Jim Robb, director and senior agricultural economist with the Livestock Marketing Information Center in Lakewood, Colo., joined Kalo on a Pork Checkoff-hosted conference call after the report was released this afternoon.

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