Hogs & Pigs Report: U.S. hog herd smaller than expected

USDA estimates the hog herd at 75.4 million head as of Sept. 1, down 3.1 million head (3.9%) from year-ago and 1.7 million head less than the average pre-report estimate implied. The breeding herd contracted 2.3% and the market hog inventory dropped 4.1% compared with year-ago levels.

The two heaviest categories of market hogs came in fractionally higher than traders anticipated. But the number of market hogs under 50 lbs. (down 5.6%) and 50 lbs. to 119 lbs. (down 6.0%) was far less than traders expected. The market hog inventory numbers imply slaughter will run about 1.5% under year-ago levels through mid-fall. After that, slaughter should fall roughly 5.5% to 6.0% through winter and into early spring.

The much smaller summer pig crop (down 6.0%) and the 3.1% reduction in breeding herd means the U.S. hog herd will continue to contract. Fall farrowing intentions are expected to drop 4.2% from last year, but producers indicated to USDA they intend to farrow 1.4% more sows this winter, though that doesn’t fit with the breeding herd inventory.

USDA analysts revised winter-spring U.S. hog numbers substantially lower. Fall 2020 sow farrowings were trimmed by 10,000 head to 3.142 million head, which resulted in a 99,000-head cut to fall farrowing. The Dec. 1 market hog and overall hog population figures were also reduced by 190,000 head to 76.822 million and 70.646 million head, respectively. The December breeding herd was also reduced by 100,000 to 6.176 million head.

Winter 2020-21 farrowings were slashed by 190,000 head, which led in turn to a 1.292 million-head reduction in the reported winter pig crop (now at 31.978 million). As one would expect, those cuts resulted in 1.090 million cuts to the total hog and market hog population results for March 1; those now respectively stand at 73.823 million and 67.608 million head.

Spring 2021 farrowings and the pig crop were unchanged, but the big cuts made to the March population figures passed through to the June results. The June 1 hog population was chopped by 1.250 million to 74.403 million head, the breeding herd was trimmed by 10,000 to 6.220 million and the market hog inventory was sliced by 1.240 million to 68.183 million head.  

The data should be price-supportive for hog futures, especially given their discounts to the cash market.