Our estimates are that the breeding herd on September 1 was down 2.5% from a year ago. The inventory of market hogs this fall should be adequate based on the pig crop last spring. Supply growth will be limited this winter and next spring as productivity is expected to return to trend and smaller herd limits farrowings.
Highlights
- Our estimates are that the breeding herd on September 1 was down 2.5% from a year ago. The inventory of market hogs this fall should be adequate based on the pig crop last spring. Supply growth will be limited this winter and next spring as productivity is expected to return to trend and smaller herd limits farrowings.
- Hog slaughter last week was lower than expected at 2.5 million head, lower than a year ago. Lower production helped firm up prices across a range of products, especially loins, picnics and hams.
- Pork production is expected to seasonally increase in the fall and run about 3% above last year(2% higher slaughter and 1% higher weights). USDA quarterly survey results to be released on Thursday will help firm up some of those forecasts and offer an indication for next spring. Our current projection is that output during winter/spring will be near year-ago levels, a function of the lower breeding herd and productivity growth returning to long-term trend.
- October is pork month and retail features provide a boost for retail cuts, especially loins. Heavy weights and increase in slaughter is expected to pressure trim prices lower. Hams remain dependent on export orders.
Full Report
USDA will release on Thursday, Sept. 26, the results of its quarterly survey of U.S. hog producers, providing a count of the supply on the ground as well as expectations for hog supplies in the next few months. Below we offer some ideas as to what the report may show and what that could mean for the pork market going forward.
Summer Supply vs. December-February Pig Crop
The latest USDA estimates pegged the pig crop for December-February at 33.148 million head, 1.9% higher than the previous year, an indication about the potential hog supply next summer. Now that we have slaughter figures for June-August, the actual supply may have been a bit higher than previously thought. Daily slaughter during this period was 2.6% above year ago. USDA may go back and revise up some of the pig crop numbers reported previously.
Fall Supply Expectations
It is broadly expected that hog numbers in the fall will be up vs. a year ago. The June survey pegged the March-May pig crop 1.8% above year-ago levels and since December-February seems to have undercounted the supply, one might expect that to be the case for the spring pig crop as well. However, this is far from a given, especially considering the reduction in the breeding herd last year and negative producer margins last fall and winter. Hog weights were higher than expected for much of the summer, another indication of higher supplies but they have stopped going up. The trend in weights bears watching as we ponder supply in the next three months. We still expect pork production during September-November to be up about 3% y/y.
Winter Supply
One of the numbers that will be watched closely in the upcoming report is the pig crop for June-August. Farrowings are expected to be lower since the breeding herd on June 1 was estimated to be down 3.2% from the previous year. This was reflected in producer farrowing intentions at 2.963 million, 2.5% lower than a year ago. In the last three years the ratio of farrowings to the breeding herd has been near 49% and the farrowing intentions in the June survey were at 49.3%, so very much in the ballpark. The big question mark is the number of pigs saved per litter this summer. It was a relatively mild summer, which may have helped productivity. At the same time, productivity levels appear to have returned to the pre-COVID trend, as illustrated in the chart at the top of the page. The trend yields a pig per litter rate of 11.66, 0.4% higher than a year ago. Our guess is that the survey will be a bit higher but probably no more than 1% above year ago levels. As a result, the pig crop for June-August is likely to be below year ago, anywhere between half a percent to 1.5% lower than last year. This implies a similar decline in hog slaughter for December- February.
Spring and Summer of 2025
Our current estimate is for the September 1 breeding herd at 6.026 million head, about 20k head higher than the June count but still 2.5% lower than a year ago. Lower grain prices and improving producer margins this spring and summer will likely continue to increase gilt retention vs. previous years but the pace of growth is likely to be slow. Farrowings during September-November and December-February are likely to be 0.5% to 1% lower than a year ago based on that breeding herd level. Considering that the growth in pigs per litter is also expected to increase by less than 1% in the next two quarters, we would expect very modest if any growth in the pig crop and thus slaughter next spring and summer. Our current forecast is for hog slaughter to be about unchanged during that period and down slightly (-0.3%) for all of 2025.
Price Chart
Forecasts
Steiner Consulting Group produces the National Pork Board newsletter based on information we believe is accurate and reliable. However neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.
Content reshared courtesy of the Pork Checkoff, Des Moines, Iowa
