DES MOINES, Iowa — Last month’s U.S. hog numbers were the highest Sept. 1 inventory on record since the estimates began in 1988, totaling 77.7 million, or up 3 percent from a year ago and 3 percent from June 1.
These were larger than analysts’ pre-report estimates of a 2.9 percent increase from last September. “We are in a growth industry,” said Joe Kerns, president of Kerns and Associates in Ames, Iowa. “I think this is a healthy problem that we have – that we continue to raise more animals is not an accident, and I think it’s a sign of some optimism within the industry.”
He joined Ron Plain, University of Missouri professor emeritus, and Len Steiner, president of Steiner Consulting Group in Merrimack, N.H., to analyze the USDA quarterly Hogs & Pigs report in a Sept. 27 teleconference.
The report said breeding inventory, at 6.43 million head, was up 2 percent from last year and up slightly from the previous quarter. U.S. market hog inventory, at 71.2 million, was up 4 percent from last year and 3 percent from last quarter – also the highest Sept. 1 market hog inventory since 1988, which Plain said would ultimately result in record slaughter.
For the week ending Sept. 27, the preliminary hog slaughter total reached 2.64 million, up 14,000 from the previous two weeks – although the market hog inventory is not evenly distributed, he explained.
“We had a new daily record this (September), with 491,000 head slaughtered on September 10, which, by my data, is the biggest slaughter day ever,” Plain said. “Lots of pigs, lots of records, and looks like we have enough capacity to handle it.”
Kerns said concerning the record market hog numbers, there’s “plenty of pork, plenty of slaughter capacity. But somebody’s got to eat this stuff, and what we’re finding is that currently, we’re estimating the next year, in 2020, we’re going to have to export about 26.2 percent of all the pork production in the country.
“If we fall short of that? We will probably have more pork than we can consume at reasonable prices in the United States, and certainly you know, the bet is on China. If China comes in here for big numbers, our 26.2 (percent) maybe too light, in which case, hog prices will be heading higher,” he added. “But that’s an awful big bet for this industry on how quickly the export market is going to continue to develop.”
Moreover, the USDA recorded 22.6 million head in the under-50 pounds category, a 1.9 percent increase from last September. In the 50-119-pounds category, the number was at 20.84 million, up 2.4 percent.
However, in the 120-179 pounds category, there were 14.8 million animals, up 5.3 percent, larger than the analyst forecast of 3.6 percent. In the 180-plus pounds category, the number 12.96 million, up 6.4 percent from a year ago, compared to analyst predictions of 4.3 percent.
“We’re going to have plenty of hogs to process – lots of pork this fall,” Plain said. “Still more pork in the winter than a year ago, but not quite as burdensome as it might be in the next few weeks.”
The report said the June-August 2019 pig crop, at 35.3 million, was up 3 percent from 2018, the largest June-August figure since estimates began in 1970. Sows farrowing during this period totaled 3.18 million, down 1 percent from 2018.
In addition, the sows farrowed during this quarter represented 50 percent of the breeding herd, with the average pigs saved per litter at a record high of 11.11 for the June-August period, compared to 10.72 last year – which Kerns said was “the most pronounced number to me that jumps out on this (report).”
As a result, U.S. hog producers intend to have 3.16 million sows farrow between September-November, and 3.11 million farrow between December 2019-February 2020.
“I find this is consistent with the anecdotal information that we pick up from our producers, as well as genetic companies in the barns,” Kerns said. “We are continuing to save more and more pigs, and our productivity and the proficiency of our producers is being exposed in here.
“We’ve got some very dynamic forces at play right now – specifically with what the exports look like and the promise of what China is bringing. The optimism that we have on the board is certainly not going to discourage very many folks from continuing to produce and what the prospects of tomorrow bring.”
David Herring, National Pork Producers Council president and a North Carolina producer, said pork is in short supply in China because “African swine fever has ravaged the Chinese hog herd and significantly reduced the production of pork.
“When you consider that China is the largest producer and consumer of pork in the world, the importance of this market to U.S. pork producers is clear,” he said, regarding China’s reported suspension of punitive tariffs imposed on U.S. pork imports.
“U.S. pork exports could singlehandedly make a huge dent in the trade imbalance with China. We are hopeful that this apparent gesture of goodwill by China leads not only to more sales of U.S. pork, but that it contributes to a resolution of U.S.-China trade restrictions.”
As the nation’s top hog-producing state, Iowa had the largest inventory on record Sept. 1, at 24.9 million head, up 6 percent from the previous year, with North Carolina at 9.5 million and Minnesota at 9 million.
According to The Associated Press, the growth of Iowa’s record hog numbers comes as environmental activists are trying to force the state to slow expansion of pig farms. In fact, a state court judge on Sept. 10 said two activist groups may proceed to trial in their lawsuit, which alleges the state’s policy of expanding hog farms and its voluntary farm pollution controls violate the rights of citizens to clean water in the Raccoon River.
In Illinois, total inventory was 5.3 million, unchanged from June 1 but down 3 percent from last year. In Indiana, inventory was estimated at 4.3 million, up 100,000 from last September, according to USDA.
In Michigan, inventory was estimated at 1.24 million pigs, up 20,000 from a year ago. Ohio’s inventory was estimated at 2.74 million, up 190,000 from last September.
The report concluded the total number of hogs under contract owned by operations with more than 5,000 – but raised by contractors – accounted for 48 percent of the total U.S. hog inventory, unchanged from the previous year.