Jim Long Pork Commentary, USDA December 1 Hogs and Pigs Report, December 28th 2020

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Jim Long, President and CEO Genesus Genetics

 

USDA December 1 Hogs and Pigs Report

(1,000 head)

December 1

2019

2020

2020 as percent

of 2019

Kept for Breeding

6,471

6,276

97

Market

71,757

71,226

99

Market Hogs and Pigs by weight groups

Under 50 pounds

22,048

21,739

99

50-119 pounds

20,648

20,260

98

120-179 pounds

15,256

15,246

100

180 pounds and over

13,816

13,980

101

Fig Crop

71,829

71,030

99

Dec 2019-Nov2020 (12-Months)

(1,000 head)

Sows Farrowing

Pigs per litter

Pig Crop

2019

2020

2019

2020

2019

2020

12,701

12,641

10.98

11.03

139,449

139,418

Observations

Breeding Herd Declining

The December 1st USDA report indicates the U.S. breeding herd has declined 195,000 in the past year. The report indicates reduction the last three months was 57,000. There is no doubt the U.S. breeding herd has been declining. We believe the trend will continue for some time yet.
The latest weekly sow slaughter was over 69,000 – a liquidation level.

Market Hogs Number

Market hog numbers in the December 1st report indicate 1% less than a year ago. So much for the predictions of more hogs in 2021 than 2020?

The USDA Report on September 1 indicated 10% more hogs over 180 pounds. They have now gone back and revised it to 1% as the reality of what was actually marketed in that weight group the last three months was far different than indicated September 1.

It is fair to question the accuracy of USDA numbers. They have overestimated production to the detriment of producer pricing for the last 2 reports. How much of the December 1 report is accurate? It’s a fair question.

We expect hog slaughter will continue the next few months lower than the USDA inventory would indicate.

21.54 Pigs per Breeding Animal

If we divide the Pig Crop Dec 1st-Nov 30th (12 Months) 139.418 million by the Dec 1st, 2019 breeding herd of 6.471 million = 21.54 pigs per breeding animal.

21.54 is a far cry from numbers that get talked about per productivity. It is a real number and this is the pig crop – many pigs die after they are born/weaned. Nothing like the grim reality of farmer arithmetic.

The USDA Dec 1st Report indicates 2% more sows farrowing 2021. This with 3% fewer sows in inventory? Some data doesn’t make any sense. There will be fewer sows farrowing in our reality.

Other News

Lean Hog Future market took Dec 1st USDA report in stride last Thursday. First 2 months down, the next 6 up.

Small pig cash prices continue to increase. Early weans up $2.00 – Feeder pigs up $4.00. Last week Avg. Cash Early weans – $50.54 and 40 lb. Feeder pigs – $59.70. These prices are a real indication of demand. Lots of empty barns- Many integrators buying pigs to fill barns empty due to seasonal supply, PRRS, and PED. Cash pigs go to highest bidders and it has become a sellers’ market. Not that long ago some 40 lb. feeders sold for $10. Surest cure to low prices is low prices.

There will be fewer hogs in 2021 than 2020. We believe current lean hog futures are underestimating 2021 prices.

2020 is coming to an end. Good riddance. Much happened that was unpredictable and mostly bad for hog producers. Let’s hope 2021 treats us better.

“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning”.
-Albert Einstein-