DES MOINES, Iowa – The decline in inventory numbers in the June 1 USDA Quarterly Hogs & Pigs Report was “largely in line with industry expectations, making for a neutral reading,” according to one agricultural economist who analyzed the report, which was released June 29.

“Prior to the report, analysts were expecting the June level of hogs kept for breeding to decline by 1.4 percent,” said Michael Nepveux, American Farm Bureau Federation economist. “This report fell right in line with this expectation, coming in at a decline of 1.5 percent, bringing the breeding herd down to 6.230 million head.”

Sponsored by the National Pork Board and the Pork Checkoff in Des Moines, the report said, as of June 1, there were 72.5 million hogs and pigs on U.S. farms, down 1 percent from June 2021, and down slightly from March 1, 2022.

“This decrease was the first year-over-year decline for June since 2014, when the industry was dealing with PEDv (porcine epidemic diarrhea virus),” Nepveux said.

He said, however, there were some surprises for analysts in the report.

“Analysts had forecast an average increase in pigs per litter of 0.6 percent, but instead, this report revealed a decline of 0.5 percent, the opposite direction of analyst expectations, and at the very bottom of the range,” he said.

The report said the U.S. breeding inventory, at 6.17 million head, was down 1 percent from last year, but up 1 percent from the previous quarter.

Altin Kalo, chief economist at Steiner Consulting Group in Manchester, N.H., said he was surprised at the increase in breeding numbers, despite higher grain prices and lower exports.

“So, what drove that increase?” he asked. “And you know, we can all speculate as to what the reasons are. You can point at Prop 12 that got delayed, and maybe there’s a potential that that’s going to go away, hopefully.

“It also could be that we reduce the breeding herd by about 7 percent since December 2019, and so maybe that’s been enough liquidation,” he added.

The CME Group agreed with Nepveux and Kalo, saying in a June 29 statement, “The report news was neutral, with most of the numbers coming in close to expectations. The breeding herd was the most bearish of the lot, but it was still below a year ago.”

The report said the U.S. market hog inventory, at 66.4 million head, was down 1 percent from last year, and down slightly from last quarter.

“Each class of market hog inventories is also down, compared to the same time last year, with the lightest weight class down the most, at 1.3 percent lower,” said Jason Franken, Western Illinois University assistant professor of agricultural economics.

“Overall, the number of hogs weighing less than 180 pounds is about 0.9 percent smaller than a year ago, which will be the market hogs arriving at processing plants from July through November 2022,” he said.

The report also said the March-May 2022 pig crop, at 32.9 million head, was down 1 percent from 2021, with sows farrowing during this period totaling 2.99 million head, down 1 percent from 2021.

“The decline in lighter weight hogs partly reflects that the March-through-May pig crop is also 1 percent smaller than last year, as anticipated, with about 1.4 percent fewer sows farrowed, and about 0.5 percent more (11.00) pigs saved per litter,” Franken said.

“Looking forward, summer and fall farrowing intentions are down 0.5 percent, and 1.4 percent from actual farrowings last year,” he added. “These numbers should similarly imply somewhat smaller slaughter numbers in subsequent periods.”

The report added sows farrowed during this quarter represented 49 percent of the breeding herd. The average pigs saved per litter was 11 for the March-May period, compared to 10.95 last year.

The report said United States hog producers intend to have 3.02 million sows farrow during the June-August 2022 quarter, down 1 percent from the actual farrowings during the same period one year earlier, and down 7 percent from the same period two years earlier.

Moreover, intended farrowings for September-November 2022, at 3.01 million sows, are down 1 percent from the same period one year earlier, and down 5 percent from the same period two years earlier.

“Moving on to the rest of the year, farrowing intentions are expected to decline at a greater rate than analysts anticipated,” Nepveux said. “Analysts had anticipated both the June-to-August intentions to decline by 3.3 percent, with the actual intentions dropping by 4.4 percent, outside of the lower end of the expected range.

“September-to-November intentions were forecast to decline by 1.2 percent, but instead, dropped 1.8 percent, to 3.084 million head, still within the expected range,” he added. “When combining these lower intentions with the struggles in pigs per litter, we may be looking at reduced hog supplies and reduced slaughter levels as we move forward throughout the year.”

Regarding prices, Franken said, “In general, hog prices tend to be higher in the 2nd and 3rdquarters, with lower prices in the 1st and 4th quarters.

“Consistent with that pattern, this price series is forecast to average about $103.78 per cwt (centum weight or hundredweight) for the 3rd quarter of 2022, falling to $91.70 per (centum weight or hundredweight) by the 4th quarter, and $92.59 per (centum weight or hundredweight) for the 1st quarter of 2023, before rising to $101.47 per (centum weight or hundredweight) for the 2nd quarter of 2023.

“These projections are consistent with the supply and demand scenario currently anticipated,” he said. “However, if greater production is realized or if export demand softens, prices may be lower.”

Regional hog numbers

The report said Iowa hog producers June 1 had the nation’s largest inventory, with 23 million head. But inventory was down 100,000 head from the previous quarter, and down 3 percent from the previous year. The March-May 2022 quarterly pig crop was 5.78 million head, up 8 percent from the previous quarter, but down 1 percent from last year.

The state also had a total of 505,000 sows farrowed during this quarter. The average pigs saved per litter was 11.45 for the quarter, and producers planned to farrow 510,000 sows and gilts in the June-August 2022 quarter, and 510,000 head during the September-November 2022 quarter.

In Indiana, the total hog and pig inventory was estimated at 4.35 million head, up 150,000 head from a year ago, according to State Statistician Nathanial Warenski.

The state’s breeding hog inventory, at 250,000 head, was down 4 percent from last June. Market hog inventory, at 4.1 million head, was up 4 percent from last year. The average pigs saved per litter for the March to May quarter was 10.7, compared to 10.9 from the same period last year.

In Illinois, the total hog and pig inventory was 5.3 million head, unchanged from March 1, 2022, and unchanged from last year. Breeding inventory, at 620,000 head, was up 30,000 from the previous quarter but down 30,000 from last year.

The state’s market hog inventory, at 4.68 million head, was down 1 percent from last quarter, but up 1 percent from last year. The March-May 2022 pig crop, at 2.84 million head, was up 1 percent from 2021. Sows farrowing during this period totaled 265,000 head, up 5,000 from a year ago. The average pigs saved per litter was 10.7 for the March-May period, compared with 10.85 last year.

In Michigan, the total hog and pig inventory was estimated at 1.19 million head, down 20,000 head from a year ago, according to Marlo D. Johnson, USDA Great Lakes Region director.

The state’s breeding hog inventory, at 110,000 head, was down 5,000 from last June. Market hog inventory, at 1.08 million head, was down 1 percent from last year. The average pigs saved per litter for the March to May quarter was 10.8, compared to 10.7 from the same period last year.

In Ohio, the total hog and pig inventory was estimated at 2.6 million head, up 100,000 head from a year ago, according to State Statistician Cheryl Turner. Breeding hog inventory, at 180,000 head, was down 10,000 from last June.

The state’s market hog inventory, at 2.42 million head, was up 5 percent from last year. The average pigs saved per litter for the March to May quarter was 11.3, compared to 10.4 from the same period last year. (Kentucky and Tennessee weren’t included in the report).