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September hog numbers show a continued expansion of herd
 

By DOUG SCHMITZ

DES MOINES, Iowa — The Sept. 1 USDA Quarterly Hogs & Pigs report showed continued expansion of the U.S. hog herd in the third quarter – numbers that were mostly in line with pre-report expectations, according to one agricultural economist who analyzed it.

“It was the report dominated by 3s – hog inventory up 3 percent; pig crop up 3 percent; breeding herd up 3 percent; and farrowing intentions up 3 percent,” said Dave Miller, Iowa Farm Bureau director of research and commodity services.

He joined Len Steiner, president of Steiner Consulting Group in Merrimack, N.H., and Scott Brown, University of Missouri associate extension professor of agricultural and applied economics, in analyzing the report last month.

“Also of note in the report was an increase in pigs per litter for the June-August quarter, to a record level of 10.72 pigs per litter,” Miller added.

The report said U.S. inventory of all hogs and pigs Sept. 1 was 75.5 million head, up 3 percent from last September and from June 1.

“In terms of total inventory numbers, this report continues the trend of record numbers of hogs in the United States,” Miller explained. “Each of the past four quarterly hog and pig reports have reported record numbers of hogs on a quarterly basis.”

But while the report once drove prices, Steiner said that’s not so much the case anymore. “This year, we are going to export about 22.3 percent of all the pork production in the United States,” he noted. “For 2019, we are putting in 22.8 percent, up about 0.5 percent, compared to production.

“We think that is really the driver. If we don’t export this, we will tank the market. That’s what’s picked up and prices can move higher.”

Among the states, the report said Iowa hog producers accounted for the nation’s largest inventory, at 23.6 million. North Carolina and Minnesota had the second- and third-largest inventories with 9.4 million and 8.6 million, respectively.

In Illinois, total hogs and pigs as of Sept. 1 was 5.45 million, up 2 percent from June 1 and 1 percent from last year. In Indiana, the total was estimated at 4.2 million, up 100,000 from a year previous.

Moreover, Michigan’s total was estimated at 1.22 million, up 30,000 from a year ago. Ohio’s total was estimated at 2.80 million, down 50,000 animals from last September.

The report said U.S. market hog inventory, at 69.2 million, was up 3 percent from last year and 4 percent from last quarter. The June-August 2018 pig crop, at 34.2 million, was up 3 percent from 2017, with sows farrowing during this period totaling 3.19 million, up 3 percent from 2017.

The report stated that sows farrowed during this quarter represented 50 percent of the breeding herd. The average pigs saved per litter was a record high of 10.72 for the June-August period, compared to 10.65 last year.

U.S. hog producers intend to have 3.16 million sows farrow during the September-November quarter, up 2 percent from actual farrowings during the same period in 2017. Intended farrowings for December-February 2019, at 3.12 million sows, will be up 2 percent from 2018 and 4 percent from 2017.

Breeding inventory, at 6.33 million, was up 3 percent from last year, and up slightly from last quarter.

“If you look at the number of pigs per sow, we’re 34 percent higher now, so a lot more productivity,” Brown said. “For 2019, we’re going to grow pork production on an annual average somewhere in that 3.5 to 4 percent range.”

For national weighted average carcass, Brown forecasts the price for fourth quarter (to be released Dec. 20) at around $50 per cwt. Going into 2019, he predicts Quarter 1 at $58, Quarter 2 at $61 and Quarter 3 at $58.

“This report confirms to me that we’re going to see larger supplies of pork coming on the marketplace in 2019,” he added.

But Steiner said the tariff situation and African swine fever (ASF) could cause the export market to go either way. “If exports drop down to 18 percent, it will be a debacle,” he said. “ASF is a major problem in China. If China decides to come to the U.S. for extra pork, there’s a bull argument there.

“If this just continues along, and China sticks to their guns that they don’t want to budge on these economic issues for the tariff war, then that’s a little bit bearish.”

 

10/17/2018