Market News & Headlines >> Hog Herd Large, but Expansion Plans Curtailed
Friday’s quarterly USDA Hogs and Pigs report confirmed a large year-over-year increase in the size of the U.S. hog herd, but pegged the breeding herd as well as spring and summer farrowing intentions below expectations, providing somewhat supportive news for deferred hog futures.
USDA pegged all hogs and pigs as of March 1 at 107.2% of a year earlier, compared to trade estimates averaging 106.8% in a range from 105.0-108.5%, according to a Reuters News Service survey. The market hog inventory was pegged at 107.7% versus trade estimates that averaged 107.2% in a range from 105.0-109.0%.
However, USDA’s count of the number of hogs kept for breeding purposes, at 102.2%, was below trade estimates that averaged 103.6% in a range from 102.4-104.6% The number of sows farrowed during the December-February quarter, at 102.4%, was below estimates that averaged 103.7% in a range from 103.0-104.0%. Actual December-February farrowings were also below intentions of 103.9% of a year earlier reported in USDA’s December inventory report.
On the bearish side, the December-February pigs per litter came in at 106.7%, near the high end of trade estimates that averaged 105.1%. The pigs per litter number was record high for the quarter, confirming that PEDv is no longer having a notable effect on U.S. hog supplies. The strong breeding herd efficiency resulted in a December-February pig crop that was 109.2% of a year earlier, in line with trade expectations that averaged 109.0%.
Looking further out, March-May farrowing intentions were pegged by USDA at 102.1% of a year earlier, below trade expectations that averaged 103.2% in a range from 102.9%-103.8% and below USDA’s December survey estimate of 103.2%.
Probably the most surprising estimate in Friday’s report was the June-August farrowing intentions at only 97.9% of a year earlier, versus trade expectations that averaged 102.9% in a range from 102.0%-103.8%.