ThePigSite.com - news, features, articles and disease information for the swine industry

News

Pork Commentary: Good News – Pig Crop Smaller than Last Year

05 January 2016
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.

CANADA - The USDA December 1st Hogs and Pig Report had a very surprising statistic. In the three months of September–November the US pig crop was smaller, compared to the same time last year. This in the face of some dire predictions of massive expansion and unsustainable production levels that could overwhelm future packer capacity.

The Pig crop was 30.271 million, down about 400,000 head from the same time a year ago. Less is, not more and this should be positive for summer hog prices.

Expected Farrowings December – February 2,840,000, down 2% from a year before.

Our Observations

  • 180 pounds plus in Market Inventory is up about 600,000 over a year ago. You take this increase of total Inventory and everything below 180 pounds is less than 100% of a year ago. This means to us by February 1 year over year hog marketing should have little increase. This should help stabilize lean hog prices.

  • Kept for breeding - December’s Report shows 6,002 million head that is up only 16,000 from the September 1st Inventory. Not exactly a big expansion. We expect low hog prices have curtailed many expansion plans. Nothing like Red ink to spoil the party.

  • The Pig Crop we expect has been curtailed by the AI extender issue that has hit many AI Studs. We understand it was widespread issue caused by one company whose extender appears to have issues. We expect a class action lawsuit of injured parties could be coming. It is reasonable to expect the issues we have heard could have cut overall production by several 100,000 pigs.

  • Expected Farrowings down 2% considering more sows year over year could also be continued fallout from the extender issue with lower conception and farrowing rate.

  • Most producers are losing money. We expect this scenario is causing some producers to cut back or liquidate. Going forward these losses will also curtail sow herd expansion. The high cost of new buildings and equity levels needed for loans is also holding back expansion.

  • US Pig Crop last twelve months 120,079 million pigs. Breeding herd is 6 million = 20 pigs per breeding animal per year = long way from 30 pigs per.

  • If the US market hog numbers are the same or similar to this past summer which the 1% lower in the under 50lb. category indicates. We believe summer lean futures are currently undervalued. We expect lean hog prices to move towards this past summer lean hog prices.

  • Summer Synopsis – same or fewer hogs – demand should be similar. Packers have been making good money and they are like us farmers (can’t stand prosperity), they will give it back chasing shelf space and export markets etc.

 

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.



Share This

News By

Related News

USA Hog Market

News from United States  24 November 2016

Pork Commentary: EuroTier 2016

News from Germany  22 November 2016

More News

Our Sponsors

Partners


Seasonal Picks

The Commuter Pig Keeper - 5m Books