Economists recently analyzed the third-quarter USDA Hogs and Pigs Report during a National Pork Board webinar held on September 26, providing key updates on the current state of the global pork industry.
US Hog Inventory Insights
Lee Schulz, professor of economics at Iowa State University, highlighted that the total hog and pig inventory was reported at 76.48 million head, marking a 0.5% increase compared to the previous year. This figure aligns closely with pre-report expectations. The kept for breeding inventory stood at 6.04 million head, a 2.2% decrease from last year, while the market hog inventory was 70.4 million head, up 0.7%.
Sows farrowing from June to August decreased by 1.7% compared to the previous year, while pigs per litter reached a record estimate of 11.72, representing a 0.9% increase year-over-year.
“With the sows farrowing numbers and the pigs saved per litter, we estimate a pig crop of 35.03 million, which is 0.8% lower than a year ago but still within pre-report expectations,” Schulz noted.
Market Hog Implications
Regarding the market hog inventories, Schulz pointed out that June 1 slaughter levels were up 2% compared to a year earlier, and year-to-date hog slaughter is up by 1.2%, surpassing 1.1 million head compared to 2023 levels.
Producer-owned hog weights have also been on the rise, exceeding the average from 2015-2019. Schulz suggested that producers might need to consider market timing adjustments to optimize these increased weights.
The current projection for pork production in 2024 is set at 27.9 billion pounds, which would result in a record level of pork production per breeding animal. “We are at historical productivity levels,” Schulz said. “We’re on a new trajectory, experiencing year-over-year growth, similar to the pre-2020 period.”
Lower incidence rates of porcine reproductive and respiratory syndrome (PRRS) and porcine epidemic diarrhea virus (PEDV), as indicated by the latest Dr. Bob Morrison Swine Health Monitoring Project data, have contributed to this productivity increase, according to Schulz.
Pork Production Trends and Global Market Outlook
Brett Stuart, president and co-founder of Global AgriTrends, echoed this positive sentiment, pointing to notable increases in production. “Weekly pork production from January to May was up by 0.6%, and June to August showed a 3.8% rise due to increased weights,” Stuart explained.
Initially skeptical of the USDA’s projected 2.7% growth for 2024, Stuart now believes that this ambitious target is within reach.
Stuart also discussed the potential implications of a beef shortage expected in 2025. “The beef herd is down 10%, calf prices are high, and pasture conditions have been favorable until recently,” he said. “We expect to see restocking of the cow herd in 2025, which will reduce cow slaughter and decrease beef production into 2026.”
Strong Meat Consumption Continues
Despite rising prices, Stuart emphasized the continued strength of meat consumption, stating, “Consumers love meat. They are paying significantly more, and none of it is going to waste.”
Export Highlights: Mexico and China
Among U.S. export markets, Mexico remains a standout performer. “Growth to Mexico has been impressive. We are approaching 2.7 billion pounds of pork exports to Mexico,” Stuart remarked. “The majority of what we send is bone-in fresh hams, which are transported by trucks across the border daily without the need for freezing or boning costs. This gives the U.S. a competitive edge.”
Currently, 51% of Mexico’s pork demand is met through imports, primarily from the U.S. “This highlights our mutual dependency, and it explains why the U.S. and Mexico are effective in resolving issues,” Stuart added.
While Stuart expects China’s overall pork demand to decline, he believes demand for specific products like ears, feet, neckbones, and tails will continue. However, he noted that import demand for whole muscle cuts is currently on hold and may not return to previous levels.
