U.S. Hog Herd Continues to Climb

Expansion in the Pig Industry 033020

The hog herd is expanding. That’s according to the USDA Quarterly Hogs and Pigs report. Numbers are increasing in all categories compared to one year ago.

Yet, how expansion continues amid COVID-19 is anyone’s guess.

Talk to Brad Greenway of Greenway Pork in Mitchell, S.D. He’ll say expansion conversations were occurring across the industry but right now, he has other plans.

“We are not looking at expanding, I would say, at least in the next year,” Greenway says. “Just the amount of uncertainty we see [and with] the new plants that come on, the slaughter capacity is filled up.”

Despite his reservations, USDA says in its Quarterly Hogs and Pigs report, the U.S. inventory of all hogs and pigs on March 1 was 77.6 million head, up 4% from a year ago. Breeding inventory, market hog inventory and the December through February pig crop are all higher from one year ago too.

“We are continuing at expanding the herd,” says John Nalivka with Sterling Marketing Incorporated. “When you look at losses to the producers, you know, when will they slow this down significantly? They’re not.”

Prices are hanging in the 60-cent range where producers say it’s hard to make a profit.

“That’s below breakeven,” Greenway says.  

Nalivka says export demand could boost prices. China has been purchasing U.S. pork due to demand stemming from the outbreak of African swine fever. The country even bought pig pork purchases this month.

“We had good exports last year,” Nalivka says. “Roughly, 33% of our exports are going to China, which is what we expected. At the same time, China is buying all proteins of all sources.”

Quite a bit has happened since the report was tallied. COVID-19 hit U.S. shores. Nalivka says U.S. producers may not have updated data to even reflect how that could impact the pork industry for another month.

 
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