Industry News - AM

‘Disciplined’ hog herd expansion underway


By Lisa M. Keefe on 9/28/2015

The U.S. inventory of all hogs and pigs as of Sept. 1, 68.4 million head, was at a record level, up 4 percent from the same period a year ago and up 2 percent from the last quarterly report at the beginning of June, according to the USDA’s National Agriculture Statistical Service (NASS).

The average pigs saved per litter also set a new record high: 10.39 for the June-August period, compared to 10.16 last year and 10.37 at the last report. Pigs saved per litter by size of operation ranged from eight for operations with 1-99 hogs and pigs to 10.40 for operations with more than 5,000 hogs and pigs.

The June-August 2015 pig crop, at 30.6 million head, was up 1 percent from 2014. Sows farrowing during this period totaled 2.94 million head, down 2 percent from 2014. The sows farrowed during this quarter represented 50 percent of the breeding herd.

In a call sponsored by the National Pork Board after the report was released, livestock analysts agreed the data showed an expanding hog herd — but one that’s expanding in a “disciplined” manner, they said.

“It’s a pretty decent increase,” said Altin Kalo, market analyst for Steiner Consulting Group of Merimack, N.H. ”It shows up in the size of the breeding herd. The implication is for steady growth as we go into next year, which should translate into farrowings that are steady to slightly higher, especially as we go into the second quarter of 2016,” he said.

Said Purdue University ag economist Chris Hurt, “I tend to view the current expansion as a disciplined expansion because I’ve seen how the industry historically has responded to higher profitability. And we’ve had a big profitability jump but a disciplined expansion.”

United States hog producers intend to have 2.92 million sows farrow during the September-November 2015 quarter, down 2 percent from the actual farrowings during the same period in 2014, but up 5 percent from 2013. Intended farrowings for December-February 2016, at 2.87 million sows, are down 1 percent from 2015, but up 4 percent from 2014.

Looking ahead, Victor Aideyan, senior analyst with Hisgrain Commodities, in London, Ontario and Ames, Iowa, noted that the domestic industry tends, “going into the fourth quarter,” to have losses.

“So, we’ve had a rally in the last six weeks or so, but it’s still an opportunity to do some hedging,” he pointed out.


 
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