The March Hogs and Pigs Report looks “sharply neutral” upon first glance, AgriTalk’s Chip Flory said during the Thursday afternoon show.
“Sharply neutral is a great way to put it,” said his guest, Oliver Sloup, vice president and co-founder of Blue Line Futures. “It could potentially be spun as bullish. Hopefully we’ve got the bad news out of our system. Knock on wood.”
“Lean hogs have just been beaten and battered for the last several months. I continue to believe there’s light at the end of the tunnel,” Sloup said.
Pork producers indicated to USDA they intend to farrow slightly fewer sows through spring and summer than they did last year:
- March-May farrowing intentions are down 1.2%
- June-August farrowing intentions down 2.9%.
- Traders expected a 0.6% and 0.1% increase, respectively.
“If you’re going to look for a bullish spin on it, it’s the fact that hogs have been under pressure and you’ve got no expansion in the pig herd coming,” Flory added.
Pro Farmer editor Brian Grete noted with the breeding herd coming in 0.5% bigger than a year ago, spring and summer farrowings may be higher than farmers indicated.
“Slaughter numbers have consistently run higher than expected through the first quarter. Based on the market hog inventory, that should end soon. While market hogs weighing over 180 lb. are up 2.1%, the other three weight categories are down fractionally from year-ago, suggesting slaughter should run about even with last year through the third quarter,” Grete wrote.
A Look at the Numbers
The total inventory for all hogs and pigs on March 1 was 72.9 million head. That’s up slightly from a year ago and down 2% from Dec. 1.
The market hog inventory on March 1 was 66.7 million, up slightly from 2022 and 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 51% of the total U.S. hog inventory, up 2% from 2022.
The breeding inventory numbers came in at 6.13 million head, up slightly from a year ago, but down slightly from Dec. 1. The December 2022 through February 2023 pig crop, at 32.1 million head, was up slightly from 2022. The number of sows that farrowed during this three-month period was down slightly from 2022 at 2.91 million head, which represents 47% of the breeding herd. The average pigs saved per litter was 11.02 for the December 2022 through February 2023 period, compared to 10.95 last year.
U.S. hog producers intend to farrow 2.93 million sows during the March through May 2023 quarter, down 1% from the actual farrowings during the same period in 2022, and down 3% from the same period in 2021. Intended farrowings for June through August 2023, at 2.97 million sows, are down 3% from the same period in 2022, and down 3% from the same period in 2021.
All inventory and pig crop estimates for March 2022 through December 2022 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. The revision made to the December 2022 all hogs and pigs inventory was 1.8%. A revision of 1.6% was made to the September 2022 through November 2023 pig crop. The net revision made to the September 2022 all hogs and pigs inventory was 0.4%. A net revision of 1.5% was made to the June through August 2022 pig crop.
What Do the Revisions Mean?
USDA made revisions to past data through December 2022. USDA revised the Dec. 1, 2022, herd 1.28 million head higher, with a 10,000-head downward revision to the breeding herd and a 1.290-million- head increase in the number of market hogs. The Sept. 1, 2022, herd was raised 440,000 head, with all of the increase in market hogs. Summer 2022 sow farrowings were revised up by 50,000 head, which resulted in a 580,000-head jump in the pig crop to 34.096 million. Fall 2022 sow farrowings were increased 48,000 head, with the net result a 540,000-head boost to the fall pig crop.
“The data could be mildly supportive to summer contracts as the market hog numbers were lighter than anticipated, though we doubt the report has much direct market influence on Friday,” Grete explained.
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