What Will Make Headlines in the June 2022 Hogs & Pigs Report?
Four economists take a look at the issues most likely to spark attention in the upcoming USDA Quarterly Hogs & Pigs Report to be released on June 29.
Scott Brown, economist at the University of Missouri
"The June Hogs and Pigs Report will set the stage for domestic pork supplies for the remainder of 2022. There are many factors at play that would suggest little change or a slightly lower June 1 breeding herd. Higher costs of production led by feed costs, higher costs for investment in new facilities, concerns about labor availability and future throughput at processing plants, possible U.S. economic recession, and the knowledge that demand for U.S. pork to China continues to move off of the record levels of a couple of years ago should provide plenty of reasons for no growth or a slight reduction in the breeding inventory. There appear to be few reasons on the other side of the ledger that any expansion in the breeding herd is underway."
Altin Kalo, head economist with Steiner Consulting Group
"For me, the breeding herd number is always key. There is a lot of uncertainty about the Supreme Court decision regarding California’s Prop 12. High feed costs and futures retreat will likely keep any expansion plans on ice. One way or another I think the breeding herd numbers will be in the headlines."
Nathan Losey, grain and livestock market analyst with AgResource Company
"The most important numbers in my mind will be the March-May farrowings relative to the March farrow intentions. The March Hogs and Pigs report did not show any breeding herd expansion, so I want to see if the farrowings will confirm that. Also, I will be looking at the summer and fall farrowing intentions and the June 1 breeding herd inventory. Historically, when we have seen the margins of the past year, we have also seen industry expansion. So far that has not happened.
I think the biggest constraint on expansion has been overall U.S. inflation and the rising cost of building materials, labor and other costs. If we do not see any expansion this quarter, the message to the market will be very clear: much higher margins are needed to drive industry expansion."
Christine McCracken, executive director and senior animal protein analyst at Rabobank
"Based on current availability we would not be surprised if USDA revised its March number slightly higher, but we continue to expect limited growth in the breeding herd and a slight drop in farrowing intentions over the balance of the year. Ongoing health challenges and announced capacity reductions are likely to limit productivity improvements and growth in sow numbers, but we will be on the lookout for signs of an inflection given the upbeat discussions at World Pork Expo in early June."
Check out the last Hogs and Pigs Report here.
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