Second quarter pork report brings surprises

DES MOINES, Iowa — The U.S. Department of Agriculture Hogs and Pigs report for the second quarter of 2021 brought a few surprises and plenty of questions for analysts on a National Pork Board-sponsored media call following the release of the report on June 24.

For one of the analysts on the call, some of those surprises on the production side of the balance sheet, specifically summer farrowing intentions, points to producers reacting to market volatility.

“Kind of points to these producers taking a little bit more of a measured approach to production moving forward and maybe looking at how things will play out in the markets and reacting to those a little bit more,” said Dr. Tyler Cozzens, a livestock analyst with the Livestock Marketing Information Center.

The significant differences in some of the productivity-related numbers are market signals for analysts.

“I think it’s one of those signals that, at least, myself as an analyst have been looking for, as how these producers are going to react to some of these market signals that they are getting and how they are going to approach production moving forward,” Cozzens said.

The smallest of the market pig weight categories, pigs under 50 pounds, was at 21.474 million head as of June 1. That number was down 2.9% from the same time last year, but analysts predicted those numbers to be down only 0.9% from a year ago.

The next weight category, pigs in the 50 to 119 pound weight class, at 19.349 million head, was down 2.7% from a year ago and expected to be down only 1%.

The March-May pig crop, at 33.54 million head, was down significantly from pre-report expectations. Analysts expected only a 1.8% drop from the same time last year and that number was down 3.1% from last year.

The June-August farrowing intentions, at 3.115 million head, was expected to be down 3.3% from last year, but was down 4.4%.

The March-May pigs saved per litter, typically a benchmark of productivity, showed one of the largest deviations. The number, 10.95, was down half a percent from a year ago, but was expected to be up 0.6%.

Cozzens noted that those lower productivity numbers may reflect struggles pork producers throughout the United States have had in late 2020 and continuing into 2021 with strains of Porcine Reproductive and Respiratory Syndrome.

He pointed out that while the average pigs per litter number was lower, the monthly numbers, especially in April and May, could be a signal that producers are getting a handle on the PRRS strains.

“You can see that March was 10.66 and that was quite a bit lower than normal trends that we’ve seen. That probably dragged down that pigs per litter number. If we look to April and May, we can see that jumped up to 11, 11.05 and 11.16, respectively. That shows that maybe there were some struggles with PRRS, but I think it also shows that these producers have figured out how to manage that and work through that,” he said.

Cozzens and Kevin Grier, of Kevin Grier Market Analysis and Consulting, said that the productivity numbers came as a surprise.

“I was kind of surprised about the pigs per litter. It caused me to have to revise my thinking in terms of going forward,” Grier said.

For Dr. Lee Schulz, Iowa State University Extension livestock economist, the surprise came at the other end of the numbers.

“You’ve got to look at the two heaviest market categories. The 120 to 179 pounds was three percentage points higher than the average of those pre-report expectations and the 180 pounds and over was four percentage points higher. They are still below year ago levels, but when we compare them to pre-report expectations, that’s signaling that those market-ready supplies and soon-to-be-market-ready supplies are a bit greater than we thought,” Schulz said.

The 120 to 179 pound weight category as of June 1 was 15.01 million head, down 1.5% from a year ago and it was expected to be down 4.4%. The 180 pound and over weight group, at 13.589 million head, was down 1.5% from a year ago and was expected to be down 5.6%.