"Smithfield's shares are well positioned to increase fueled by an earnings recovery given the improving hog cycle," Stephens Inc. analyst Farha Aslam wrote in a note to investors this morning.

Ms Aslam noted the quarterly report showed the sow herd on 1 March came in down 3.9 per cent or 90,000 head below last year versus expectations of a 2.6 per cent decline. "This means that the sow liquidation period is not over as some in the industry had presumed," she wrote.

She also pointed to other bullish numbers in the report, including farrowing intentions in the upcoming periods coming in below expectations, which she said "should support hog futures longer-term."

J.P.Morgan analyst Ken Goldman agreed, according to Meatingplace.

He noted very few gilts (young females who have not yet given birth) are being ordered by farms, which is keeping the total breeding herd small. "This is positive for hog farmers such as Smithfield that rely on limited supply to driver higher prices," he wrote to investors.

He went even further to suggest farrowings in upcoming quarters might be even lower than the 4 per cent drop USDA projects.

"Farmers lately have overstated their farrowing intentions — probably in an effort to dissuade competitors from increasing production — which suggests that the actual March-May decline may be steeper than 4 per cent."

On the demand side, Ms Aslam pointed to domestic demand for pork being supported by higher beef and chicken prices and international demand benefiting from greater market access to Chinese and Russian markets.