The bullish March 1 USDA Hogs and Pigs Report is a reminder of how savvy U.S. pork producers are, says Altin Kalo, chief economist at Steiner Consulting Group.
“We shouldn’t count on any significant supply growth this summer, and any supply growth that may come in the fall is going to be very modest at best,” Kalo says. “This is good news for producers. The last thing you want is to have headwinds in terms of exports along with a slowdown in sales to key markets like Mexico, while at the same time you’ve got a lot of hogs on the ground you’re going to have to push through.”
The expected reduction might be offset somewhat by higher carcass weights but the report points to a notable downward revision in USDA pork supply estimates, he concludes.
“You can look at the report itself and construe it as bullish,” Kalo says. “I think it is because we’re basically looking at supplies for the summer roughly what they were last year. In terms of slaughter, they might be even a little bit lower. If you add the normal increase you have in weights, you’re looking at a modest increase versus what USDA had in their latest estimates in March that had production up 2% to 3% year over year.”
He believes the market itself was more realistic as to what supply to expect this summer.
“There was a lot of talk during the winter about the impact PRRS was having on producers and what that implied for supplies in the summer,” Kalo adds. “I think some of that was already in the market. It just got muddied a bit because of all the stock with tariffs and the risk that that presents.”
A Look at the Numbers
The total inventory for all hogs and pigs on March 1 was 74.5 million head, down slightly from a year ago, and down 1% from Dec. 1. The market hog inventory on March 1 was 68.5 million, down slightly from 2024 and down 1% 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 March 1, unchanged from 2024.
The breeding inventory came in at 5.98 million head, down slightly from a year ago, and down 1% from March 1. The December 2024 through February 2025 pig crop, at 33.7 million head, was down slightly from 2024. The number of sows that farrowed during this three-month period was down 1% from 2024 at 2.89 million head, which represents 48% of the breeding herd. The average pigs saved per litter was 11.65 for the December through February period, compared to 11.53 last year.
U.S. hog producers intend to farrow 2.91 million sows during the March through May 2025 quarter, down slightly from the actual sows farrowing during the same period in 2024, and down 1% from the same period in 2023. Intended sows farrowing for June through August 2025, at 2.96 million sows, are down 1% from the same period in 2024, and down 2% from the same period in 2023.
“The decline in the breeding herd suggests producers are far from retaining any hogs,” Kalo says. “Implied gilt retention during the December to February period seen down 7.6% from previous year and ratio to sow/boar slaughter seen slightly lower than a year ago.”
“Trade remains a major factor going forward, however, and futures will continue to focus on the potential for retaliatory tariffs in Mexico, Canada and other countries should U.S. administration decide to go ahead with planned tariffs,” Kalo adds.
Revisions and More Revisions
Admittedly, this report came in much different than analysts’ expectations. All numbers were outside analyst estimates, Kalo says.
“You have the analysts on one hand coming up with their estimates, and usually when they do their estimates, they use what the USDA survey said the previous quarter,” Kalo says. “That’s what drives a lot of the estimates. When the USDA makes revisions like they did, they do so because of the numbers that came to market. They saw what the survey said in September, and then what December ended up being, overly optimistic in terms of overall supplies, and so that’s why you had a miss.”
The revision made to the December 2024 all hogs and pigs inventory was 1.2%. A revision of 1.4% was made to the September 2024 to November 2024 pig crop. The net revision made to the September 2024 all hogs and pigs inventory was 1.3%. A net revision of 0.1% was made to the June to August 2024 pig crop. The net revision made to the June 2024 all hogs and pigs inventory was 0.5%. A net revision of 0.8% was made to the March to May 2024 pig crop.
Questions Remain
For Kalo, one of the questions on his mind is what will the pigs per litter number be during March through May 2025? The decline that happened to December through February was more significant that the industry has seen in the previous couple of years.
“If pigs per litter during September to November were estimated at 11.92, 2.3% above previous year and well above trend, during the December to February quarter pigs per litter were 11.65, just 1.1% higher than a year ago and below the pre-COVID trend,” Kalo says. “Pigs per litter did not increase as much as expected and was not enough to offset the reduction in farrowings.”
He says the trend would suggest the number to be 11.79, a 2% increase from a year ago. However, if a similar departure from trend occurs like the December to February quarter, then spring pigs per litter would be around 11.7, a 1.2% increase year over year.
“Pork producers are very savvy. They’re not going to go out there and make the investments given all the uncertainty that exists. They also aren’t going to do it simply because the corn price is a little bit lower or they ended up with a few months of good profits after sustaining significant losses in 2023 and early 2024,” Kalo says. " Decision making now is very different than it was 10 to 20 years ago, when you had more smaller producers out there making independent decisions.”
