DES MOINES, Iowa — Last month’s record hog numbers were the highest inventory since 1964, higher than pre-report estimates – and steadily increasing, according to the June 1 USDA Quarterly Hogs & Pigs report.

 

“The amazing stability we see seems to suggest we might have a plateau in sow inventory estimates, although still growing,” said Scott Brown, University of Missouri extension agricultural economist.

“This was stronger than anticipated.” Brown joined Lee Schulz, Iowa State University extension livestock economist, and Joe Kerns, president of Kerns & Associates in Ames, Iowa, in analyzing the report, released June 29. The report stated as of June 1, there were 71.7 million hogs and pigs on U.S. farms, up 3 percent from June 2016 and up 1 percent from March 1, 2017. “All we are talking about is the magnitude and rate of growth,” Kerns told reporters. “We are all settling into the growth mode. It is simply a question of how fast.”

The report stated U.S. breeding inventory, at 6.07 million head, was up 2 percent from last year and up slightly from the previous quarter. Brown said the breeding herd is stable and still growing, with March-May farrowing intentions showing higher numbers than U.S. farm market predictions.

“Giving better economics than many of us thought when we started 2017, I would not have been surprised to see a little larger breeding herd in the report, than we end up with,” he explained.

In addition, the U.S. market hog inventory, at 65.6 million head, was up 1 percent from last quarter and 4 percentfrom last year, which was the highest June 1 market hog inventory since estimates began.

 

“Although there could be some expansion through the rest of 2017, it will be minor for the rest of the year,” Brown said.

The report said between March-May, 32.3 million pigs were  weaned on U.S.farms, with an average of 10.55 pigs per litter, up 4 percent from the same time period one year earlier, and the second-largest March-May pig crop since estimates began in 1970.

The report also said Iowa hog producers

had the nation’s largest inventory, at 22.2 million head, adding 30,000 sows this quarter, up 2 percent from the previous quarter and 7 percent from the previous year. North Carolina and Minnesota had the second- and third-largest inventories, with 9 million and 8.4 million, respectively.

In Illinois, the total inventory of all hogs and pigs on June 1 was 5.35 million, up 2 percent from March 1 and 3 percent from last year. Indiana’s total hog and pig inventory on June 1 was estimated at 4 million, up 150,000 head from a year ago.

In Michigan, the total hog and pig inventory on June 1 was estimated at 1.12 million, down 30,000 from a year ago. Ohio’s total hog and pig inventory on June 1 was estimated at 2.7 million, up 150,000 from a year ago. (Kentucky’s and Tennessee’s June hog numbers  aren’t included in the report.)

The report said the average pigs saved per litter was a record high 10.55 for the March-May period, compared to 10.48 last year. Pigs saved per litter by size of operation ranged from 7.7 for those with 1-99 hogs and pigs to 10.6 for operations with more than 5,000, the report said.

Moreover, U.S. hog producers intend to have 3.06 million sows farrow during the June-August quarter, up slightly from the actual farrowings during the same period in 2016 and up 2 percent from 2015. Intended farrowings for September-November, at 3.06 million sows, are up slightly from 2016 and by 4 percent from 2015.

The report added total number of hogs under contract owned by operations with more than 5,000 head, but raised by contractors, accounted for 48 percent of the total hog inventory, up from 47 percent the previous year.

The March-May quarterly pig crop was 5.91 million head, up 4 percent from the previous quarter and 8 percent above last year. A total of 540,000 sows farrowed during this quarter, with the average pigs saved per litter at 10.95, up from 10.75 the previous quarter.

As of June 1, U.S. producers planned to farrow 540,000 sows and gilts in the June-August quarter and 540,000 head during the September-November quarter. Dermot Hayes, ISU agricultural economist, told producers at the 2017 World Pork Expo last month that U.S. pork production hit 3.4 percent so far this year, while pork demand reached a net increase of 4 percent.

“As of April this year, exports are up 15 percent,” he said. “So, when you have a 15 percent increase in a market that’s responsible for almost one-third of your production, that can explain why prices are high when production is high also. It is as if we added 4 to 5 percent more pork-consuming Americans to the base.”

In fact, Schulz predicted many U.S. producers should see notable increases in their bottom lines. “We’re looking at an annual estimate for 2017 right around that $15 per head,” he said. “Realizing that’s very much driven by what we’ve experienced here in the second quarter where profitability looks to be in that $16 to $17 range.”