DES MOINES, Iowa — The second quarter hogs and pigs report brought some large numbers, but no real surprises.
The largest number of the U.S. Department of Agriculture second-quarter report, which measures hogs and pigs on hand as of June 1, was the 180 pound and over market hog inventory, which came in at 13.05 million.
That was a 7.5% increase over the same time a year ago and significantly larger than analysts’ pre-report estimates, which had that number up 4.6%.
However, there was a reasonable explanation for the larger-than-expected increase.
“This report’s revisions certainly matter when we are digging in and interpreting the numbers,” said Lee Schulz, associate professor of agricultural economics at Iowa State University, in a media conference call following the release of the report. The call was sponsored by the Pork Checkoff.
Schulz explained that the large number reflected adjustments that USDA made in two other categories from previous reports.
“The December-February pig crop was increased 1.3% from the previous report. That’s about 428,000 pigs, and that came about because of more sows farrowing. We’ve seen an increase of 39,000 sows farrowing,” Schulz said.
In addition, both Schulz and Steve Meyer, with Kerns and Associates, noted that those increases also were reflected in monthly slaughter numbers.
“USDA picked up a large portion of that increase in slaughter, that surge in slaughter, that we’ve seen during the month of June,” said Meyer as he read out the report numbers.
That larger number likely won’t have any impact on prices going forward as most of those hogs already have worked through the system, Schulz said.
“Yes, that number did stand out, 7.5% over a year ago, three percentage points larger than expectations, but for the most part, those hogs have been worked through, so I don’t see a major impact. That information has already been priced into the market,” Schulz said.
The big question for the U.S. hog industry, as for other livestock sectors, is what is — or isn’t — there as far as U.S. corn and soybean supplies go.
The report came a day before a widely-anticipated USDA June crop acreage report.
“No matter what the report says tomorrow, as far as acreage is concerned, we’re going to have a lot of uncertainty with grain going forward through the whole growing season. It’s going to shed some uncertainty out here on what kind of pork production we might have going forward,” said Dale Durchholz, principal with Grain Cycles.
One sign that pork producers may have that feed cost and supply uncertainty toward the top of their priority lists was reflected in farrowing intentions numbers.
June-August farrowing intentions were 3.18 million. That was down half a percent from a year ago and lower than pre-report estimates, which called for that to be up 1.3%.
September-November farrowing intentions were 3.17 million. That was even with a year ago and down from analysts’ estimates, which called for that number to be up 2.1%.
However, productivity continues to climb.
The March-May pig crop set a new record at 34.17 million, up 3.7% from a year ago and larger than pre-report estimates of up 2.6%.
The March-May pigs saved per litter number, at 11 pigs saved per litter, was 3.5% larger than a year ago and much more than the 0.8% increase predicted by analysts before the report.
“I think if we continue to see pigs per litter running at these kinds of growth rates going forward, it spells certainly a lot more hogs as we go through time,” said Scott Brown, Extension economist with the University of Missouri.