Market Bracing for Bearish H&P Data

Posted on 06/25/2019 3:21 PM

The hog industry is in a state of flux and slaughter totals leading up to USDA’s June 27 Hogs & Pigs Report have diverged widely from the rates USDA projected in its March report, raising the level of uncertainty about just what the data will show.

Hog slaughter ran about 1% over year-ago levels through late April and early May, but kill rates surged the week of Memorial Day forward, with slaughter running 9.9% and 13.2% ahead of year-ago the past two weeks, respectively. There have been rumors producers were actively pulling market-ready hogs ahead in order to get a better handle on available supplies, but we’re skeptical this would have resulted in such record-shattering slaughter figures.

We feel it’s more likely that producers reacted strongly to the late-summer 2018 news of China’s African swine fever outbreak and the resulting bullish price forecasts. We would not be surprised to see numbers come in several points higher than those generated by a Reuters survey, which is included below. Revisions to past data are also likely.

 

Hogs & Pigs Report

Analysts’ average estimate
(% of year-ago)

All hogs June 1

103.0

Kept for breeding

102.1

Kept for marketing

103.1

 

 

Market hog inventory

 

  under 50 lbs.

102.6

  50 lbs.-119 lbs.

102.8

  120 lbs.-179 lbs.

103.2

  Over 180 lbs.

104.6

 

 

Pig crop (March-May)

102.6

Pigs per litter (March-May)

100.8

Farrowings (March-May)

101.7

Farrowing intentions (June-Aug.)

101.3

Farrowing intentions (Sept.-Nov.)

102.1

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