H&P Report: Hog herd virtually unchanged from year-ago

USDA estimated the U.S. hog herd at 74.971 million head as of Dec. 1, up 15,000 head from year-ago, whereas traders expected a 481,000-head decline based on the average pre-report estimate. The market hog inventory increased 221,000 head (0.3%) from year-ago, while the breeding herd declined 205,000 head (3.3%). The fall pig crop dropped only 0.2%. While fall farrowings fell 4.0%, litter size jumped 3.9% to a record 11.66 head.  

Market hog inventories were higher than expected in each category, though fractionally under year-ago in the three lightest categories. Based on this data, slaughter should run steady to fractionally smaller than year-ago through summer.

Looking forward, hog producers intend to farrow fewer sows in the next two quarters, with winter intentions down 1.8% and spring intentions down 1.2%. But if pigs per litter continue to mark new record highs, the winter and spring pig crops would likely top the previous year.

USDA made wholesale revisions to the hog numbers for the past two years. The Sept. 1, 2023 hog population and market hog totals were boosted by 798,000 and 781,000 head (to 73.323 million and 69.144 million), respectively, while the breeding herd was cut by 73,000 to 6.179 million. The June 1 population and market hog numbers were increased by 897,000 (to 73.551 million) and 909,000 (to 67.345 million), respectively, while the breeding herd was trimmed by 12,000 to 6.206 million. The March 1 population and market hog numbers were raised by 877,000 (to 74.126 million) and 889,000 (to 67.990) million, respectively, whereas the breeding herd was left virtually unchanged (down 2,000 to 6.146 million).

These shifts came on top of big, mostly upward, revisions to the  2022 numbers as well, ranging from approximate 500,000-head increases in the March, 2022 numbers for the population and market hog totals and a 50,000-head cut to the March 1, 2022 sow herd, to 105,000-head and 100,000-head upward revisions to the Dec. 1, 2022 population and breeding herd numbers, while the market hog figure inched up just 6,000 head from December 2021.  

Based on the pre-report expectations, the data leans negative, but isn’t overly bearish. However, the sharp revisions to past data will increase trader skepticism toward these numbers and may cause them to believe USDA’s sampling methodology is consistently undercounting hog numbers.