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Our Observations
- Not sure if there has ever been a difference as great as 5% more in 180 lbs. and over and then 2% less in under 50 lbs. That’s a 7% difference year over year in less than 90 days of production. We observe the last two weeks of U.S. hog slaughter has been lower than a year ago (last week -48,000 head). You would think if there were 5% more hogs then we should be seeing bigger hog market numbers.
- Every month in 2024 the pig crop was higher than the year before until July-August.
- USDA continues to project increased pork production in 2024 of 2.75% (actual year to date 1.6%). USDA in 2025 is projecting increase of 1.8% in pork production. If pig crops continue trend of lower numbers, it’s hard to see how pork production would increase. With a smaller breeding herd, it’s not inconceivable the pig crop will decrease.
- September Report indicates Iowa decreased 80,000 sows in last year 900,000 down to 820,000, North Carolina 790,000 down to 760,000, Missouri 470,000 down to 425,000. Big gains Colorado 140,000 up to 170,000, Kansas 150,000 up to 175,000, South Dakota 305,000 up to 325,000, Illinois 650,000 up to 670,000. Some down, some up. Iowa and North Carolina have for a long time been the two major sow states, but it appears their numbers continue to shrink. We expect disease challenge and feed costs (North Carolina) has been major factors.
Summary
The U.S. hog industry drags along. There is little to get excited about as hog numbers are such to limit profit potential. Cost of production is around 86-88¢ lb. – hog price in 84¢ range. We observe September USDA inventory indicates the breeding herd expanded 36,000 from June 1st report. Not sure if we really expanded but if we did it indicates an industry that seems to accept slim profit margins. Our hope is the pig crop decline year over year in July-August is the first signal of no more increasing hog production. Less pigs would be positive for hog market. Until we change the quality of pork (taste) we produce the pork price will continue to lag beef. Last week pork cut-outs 95¢ lb., beef cut-outs $3.00 lb. Its obvious consumers will pay for taste. An industry that won’t change its current reality is not being dynamic.
