Were strong profit margins – past, present and projected – enough to encourage producers to retain more gilts? According to the Dec. 1 USDA Hogs and Pigs Report, it appears not. The breeding inventory came in at 5.95 million head, down 1% from a year ago.
“This is the smallest U.S. Dec 1. breeding herd since 2014,” economist Lee Schulz said during a webinar hosted by the National Pork Board. “Farrowing intentions are also above year-ago levels at 2.89 million sows for the December 2025 through February 2026 quarter. The outlook is favorable so the incentive is there to farrow more sows, but there is a limit given the size of the breeding herd.”
The breeding inventory was in line with pre-report expectations, Schulz says. However, some believed the breeding herd could have seen some modest expansion and been larger than a year ago.
A Report Full of Surprises
“Pre-report estimates are important because they generally reflect the aggregate opinion, or forecast, of what data will be in the report,” says Schulz, chief economist at Ever.Ag. “More importantly, these general expectations are often ‘bid into’ market prices before the report’s release. Assuming markets are efficient, the market price for hogs reflects this pre-report information even before the report is available. Therefore, much of the market reaction following the report often is relative to the market’s pre-report estimates, not necessarily the actual increases or decreases in hog supply in the report.”
Anything plus or minus more than one percentage point from the average of pre-report expectations is commonly considered a surprise, Schulz adds. For each report, there are often a couple of USDA estimates that are a surprise under this criterion.
“There were quite a few surprises in this report if you compare to the pre-report estimates,” he says. “In fact, nine of the key numbers were a surprise.”
The largest change in inventory from a year ago was in the 180 lb. and over market hog category, with a 3% increase compared to Dec. 1, 2025. On average, analysts expected the heaviest weight group inventory to be up 0.5%. That’s a difference of over two percentage points.
A Look at the Numbers
The total inventory for all hogs and pigs on Dec. 1 was 75.5 million head, up 1% from a year ago, and up slightly from Sept. 1.
The market hog inventory on Dec. 1 was 69.6 million, which was up 1% from 2024 and up slightly from the previous quarter. The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 52% of the total U.S. hog inventory on Dec. 1, up 2% from 2024.
The breeding inventory came in at 5.95 million head, down 1% from a year ago, but up slightly from Sept. 1. The September through November 2025 pig crop, at 35.0 million head, was up slightly from 2024. The number of sows that farrowed during this three-month period was up slightly from 2024 at 2.93 million head, which represents 49% of the breeding herd. The average pigs saved per litter was 11.93 for the September through November period, compared to 11.92 last year.
U.S. hog producers intend to farrow 2.89 million sows during the December 2025 through February 2026 quarter, up 2% from the actual sows farrowing during the same period in 2024, but down 1% from the same period in 2023. Intended sows farrowing for March through May 2026, at 2.91 million sows, are up 2% from the same period in 2024, but down slightly from the same period in 2023.
All inventory and pig crop estimates for December 2023 through September 2025 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. The revision made to the September 2025 all hogs and pigs inventory was 1.1%. A revision of 2.5% was made to the June-August 2025 pig crop. The net revision made to the June 2025 all hogs and pigs inventory was 1.9%. A net revision of 1.9% was made to the March through May 2025 pig crop.
Records Aren’t Easy to Break
The last 17 quarterly U.S. pigs saved per litter estimates have been records for their respective quarters, notes Schulz. The September-November 2025 pigs saved per litter was no exception, coming in slightly higher than a year ago at 11.93.
“While analysts expected another year-over-year litter rate gain and a record for the September through November quarter, they expected a lower rate of increase than has been realized over the last couple of years,” Schulz says. “On average, analysts expected the September through November 2025 litter rate up 0.8% compared to the same quarter in 2024.”
Why the slower increase? If nothing else, Schulz says comparisons are being made to a high base period a year prior.
“Normally when setting a new record, in anything, it’s by a razor-thin margin,” Schulz says. “Records are highly context-dependent. Setting a new one isn’t just about talent or hard work. It also often takes a syzygy of good circumstances and good luck. How often do all the right variables align? For the number of pigs saved per litter, it appears favorable conditions are aligning more often than not and that is expected to continue.”
Although the pigs per litter estimate is not a surprise to analysts, it was a lower growth than analysts expected.
“This is still a record – but barely. This is the first real modest productivity increase that we’ve seen in a while,” Schulz says. “That begs the question, is that related to disease incidence and impact on pre-wean mortality?”
Schulz believes the genetic potential exists to increase pigs saved per litter, but many factors have to align to push these records higher.
Where Does Trade Go From Here?
As the year comes to a close, it will be interesting to see how the market responds to this report with more supply than originally assumed in the Sept. 1 report.
“This is a bearish report, and we haven’t had one of those for a while,” Schulz says. “It’s up to the market to decide how bearish they think it is and where trade goes from here. Some of this larger supply was already priced into the market.”
Looking forward, he projects a moderately profitable 2026, with losses not projected until late in the year. He says there are favorable margins with some upside possible, but notable downside potential based on historical levels.
“There is opportunity,” Schulz says. “Allow for some upside participation. Use the tools available to help manage risk.”
