Hogs and Pigs Report: How Will Increase in Pigs Saved Per Litter Impact the Pork Outlook?
Of all the numbers in the latest USDA Hogs and Pigs Report, the number that caught economists’ eye was pigs saved per litter. The average pigs saved per litter was 11.53 pigs for the December 2023 through February 2024 period, compared to 11.02 pigs last year. That’s a 4.6% increase – a much higher jump than most analysts expected, noted Steve Meyer, Ever.Ag senior economist.
“This report confirms our expectation we’d see a smaller breeding herd, but productivity would swamp that, and we’d end up with more pigs,” Meyer said. “Productivity gains will keep 2024 pig and pork supplies very near 2023 levels.”
Meyer and Brett Stuart, Global AgriTrends president, joined National Pork Board member Gordon Spronk on a webinar hosted by the National Pork Board and the Pork Checkoff to discuss the latest report and take a look at domestic and global pork demand.
“That productivity number jumped out to me,” Stuart added. “We just continue to get better and better at this, and that's going to put more hogs on the ground this year.”
A Look at the Numbers
Outside of pigs saved per litter, the report numbers came in close to analysts’ expectations. “Normally, if you have a report like that, it's not going to move the market a lot,” Meyer said.
The total inventory for all hogs and pigs on March 1 was 74.6 million head. That’s up 1% from a year ago but down 2% from Dec. 1.
The market hog inventory on March 1 was 68.6 million, up 1% from 2023 but down 2% 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, up 1% from 2023.
The breeding inventory numbers came in at 6.02 million head, down 2% from a year ago, and up slightly from Dec. 1. The December 2023 through February 2024 pig crop, at 33.1 million head, was up 2% from 2023. The number of sows that farrowed during this three-month period was down 3% from 2023 at 2.88 million head, which represents 48% of the breeding herd. The average pigs saved per litter was 11.53 for the Dec. through Feb. period, compared to 11.02 last year.
U.S. hog producers intend to farrow 2.92 million sows during the March through May 2024 quarter, down 1% from the actual farrowings during the same period in 2023, and down 2% from the same period in 2022. Intended farrowings for June through August 2024, at 2.99 million sows, are down 2% from the same period in 2023, and down 3% from the same period in 2022.
All inventory and pig crop estimates for March 2023 through December 2023 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. The revision made to the December 2023 all hogs and pigs inventory was 1.1%.
A revision of 0.5% was made to the September through November 2023 pig crop. The net revision made to the September 2023 all hogs and pigs inventory was 2.4%. A net revision of 3.1% was made to the June through August 2023 pig crop.
Less Disease Pressure
More pigs saved per litter means a larger pig crop than analysts thought.
“We went three years without growing this number. I think it was because we were dealing with heightened disease incidence, mainly porcine reproductive and respiratory syndrome (PRRS), and some labor problems in our farms. In the last year, we really caught up,” Meyer said.
Looking ahead at 2024, he doesn’t expect the year-over-year changes to be nearly as dramatic, but he does believe that number will continue to grow and push up toward 12 pigs saved per litter over the next couple of years.
“We've had a much lower incidence of PRRS this year. Most of what we hear is that we've had a bit more porcine epidemic diarrhea virus (PEDV), but we still think herd health is the best it's been in some time. That's one of the reasons we see that big pig saved per litter number,” Meyer said.
Slaughter Capacity is a Concern in Q4
Meyer shared his concerns about slaughter capacity later this year.
“If my numbers are right, we're going to have some slaughter capacity issues in the fourth quarter,” Meyer said. “I think we're going to have plenty of hogs in the fourth quarter. I'm pretty concerned about slaughter capacity, especially with the loss of the Perry, Iowa plant going forward.”
He plans to go back and confirm all of his numbers, but he said the good thing about the report is “demand says it’s going to be okay.”
“These prices look pretty good. It didn't change my price forecast hardly at all when we put these numbers together, given where demand has been so far this year,” he said. “That's a big assumption that we continue with demand where it is. But still, the record so far this year would say the demand – both on the domestic side and on exports – is pretty good.”
A Good Road for Export Demand in 2024
Global pork and protein supplies are tightening. Stuart said it’s an interesting time because it’s not just pork, but beef supplies are shrinking globally, too. Not to mention, the European Union’s swine herd liquidation is having a significant and structural impact on the global protein industry.
“U.S. pork remains very competitive globally,” Stuart explained. “From the global standpoint, things are good. There have been some years we'd be looking at this going, ‘this is not going to be a great year from the export side.’ But things look really good on the export front. We're incredibly competitive. Our biggest competitor is now in structural decline. We have great access into these key markets now, and as long as that continues, I think we've got a good road for export demand this year.”
Read about the Dec. 1 report here:
USDA Hogs and Pigs Report: Is This a Defining Moment for the Pork Industry?
