Five 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
“Media reports and speculation have surfaced recently that industry contraction in sow numbers could occur relatively soon. I don’t expect to see a significant change to the breeding herd in the June report, but it could be an indication that the likelihood of impactful contraction later in the year is increasing if the breeding herd numbers move out of their recent sideways pattern in the June report.
The ratio of pig crop to breeding herd numbers is also one that I feel is very important. That productivity ratio has shown little growth in recent quarters after many years of pretty consistent growth. If pigs per sow productivity growth returns to the longer-term historical average, it will take even larger reductions to the breeding herd to match supplies with current pork demand.”
Brian Earnest, lead protein industry analyst at CoBank
“As a result of weak profitability, sow prices are down about 60% from 2023 peaks. Feeder pig prices have similarly fallen with early weaned feeder pig prices are down 65% from the end of January and down more than 40% from the five-year average. The breeding herd was moderately larger year-over-year on March 1. But it seems unlikely that the July 1 total will not produce a third consecutive annual decline.”
Altin Kalo, head economist at Steiner Consulting Group
“Farrowing intentions and prospects for supply next spring. I think it will be down, reflecting lower gilt retention and sow herd contraction. It will not all happen right away, but we should get an idea what the producer is thinking for next year’s supply.”
Christine McCracken, executive director, protein analyst at Rabobank
“Based on recent trends we would expect to see prior inventories be revised higher, and future farrowing intentions to be revised lower. Given current losses, there should also be a move toward liquidation and a reversal in the sow herd in the June report. Perhaps the most surprising data point in the June report, however, could be a return to growth in pigs saved per litter. Health has improved in many areas, and we could see improved productivity show itself in the June report.”
Lee Schulz, economist at Iowa State University
“In March 2023, USDA asked producers for updated March to May farrowing intentions. Data collected for the survey reflected market conditions in the weeks leading up to and the first half of March 2023. Much of the pessimism in hog market had yet to take hold. Sows farrowing during March to May 2023 and intended sows farrowing for June to August 2023 and September to November 2023 will likely make headlines. Individual state numbers can provide early indications of changes in a local market that may be masked by aggregate, weighted average, national numbers. According to reports, Smithfield Foods plans to close 37 sow farms in Missouri. The closures were to begin on May 1. The June Hogs and Pigs report may start to speak to the number of sows being removed from production.”
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