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Pork Commentary: June USDA Quarterly Hogs and Pigs Report - Apocalypse Not Now

04 July 2012
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

US - For weeks we all have been exposed to the wringing of hands by the Chicken Little’s that US packers would be overwhelmed by hogs this fall and that there would not be sufficient shackle space to handle a perceived deluge of hogs. Some chicken little’s went so far to bring up the fall of 1998 when hogs crashed to 10 cents a pound, writes Jim Long.

In our opinion the USDA June Hogs and Pigs report dispels all Fall Apocalypse.

USDA Market Hogs – 1 June
(thousand head)
  2009 2010 2011 2012
Market 60,842 58,362 59,517 59,967

The USDA has counted about 450,000 more market hogs this year June compared to last. On a 25 week production cycle less than 20,000 extra a week or 1 per cent. No way will packers shackle space be overwhelmed. Of note June 2012 is about one million fewer market hogs than June 2009. Also USDA 1 June under 50 pounds this year (this falls market hogs) is 19,558 million up only 15, 000 head from last year.

June US Breeding Herd
(thousand head)
  2009 2010 2011 2012
Kept for breeding 5968 5788 5803 5862

The breeding herd has expanded, up 60,000 from a year ago but still 100,000 head lower than 2009. The USDA projects that 42,000 of the 60,000 increase in the last year came from 1 March to June. When there is profitability there will be expansion. We expect the recent spike in corn will stymie optimism going forward. In Canada we are aware of over 15,000 sows of early wean production that are currently going to the US which are being eliminated, this from a combination of failure of contracts being honoured, low SEW prices, and high feed. It is not all pretty in the hog business and this in itself will slow expansion.

Sows Farrowing
(thousand head)
Sows farrowing 2008 2009 2010 2011 2012
December - May 6123 6029 5801 5760 5796

In the six months December – May US farrowing’s stayed very similar to last year up only 36,000. Sow farrowing’s seemed to have had little productivity gain. Farrowing’s of 5796 (thousands) and a breeding herd of 5862 indicates less than 2 farrowing’s per breeding animal per year. Not exactly 2.5 litters per year is it?

Pig Crop
(thousand head)
Pig Crop 2008 2009 2010 2011 2012
December - May 57019 57644 56326 57118 58121

The pig crop keeps growing, up one million for the last six months year over year. What’s interesting to us is the last quarter. March – May was up only about 200,000 of the one million – the effect of PRRS?

Productivity

The US pig crop over the last twelve months June – May was 116,841 million head. The breeding herd averaged about 5.820 million over the same twelve months. When we divide the pig crop by the breeding herd in that time frame we get 20.07 pigs per breeding head. Not exactly 25 is it? Lots of room for improvement, as half of the industry is averaging below 20. We would challenge our competitors to find one Genesus customer below the industry average.

National Swine Industry Conference

If you’re coming to NSIC join Genesus 8 pm Sunday night at a reception in Kahunaville Lounge. On Monday at 2:30 pm Jim Long will be presenting ‘Global Swine Markets and how they affect the US.’

Summary

The 1 June USDA report indicates little change year over year in the hog inventory. Pork exports will stay strong over the coming months. There will continue to be less beef and chicken. We have lean hogs over $1.00 we need it with the rocketing feed prices. Pray for rain!

Further Reading

You can view the Hogs and Pigs report by clicking here.

Author: Jim Long, President & CEO, Genesus Genetics

To find out more about Genesus Genetics,
please take the time to visit their website at
www.genesus.com.

The opinions expressed in this commentary are entirely those of the author and can not taken to represent the views of ThePigSite.com, its owners or its management.



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