The USDA March 1 Hogs and Pigs Report was released last week. Our observations:

• Iowa State University Farrow to Finish loss calculation for December is $43.86, January $41.08, February $24.25. Our Farmer Arithmetic an average loss per head in the quarter of $36. In 2023 the whole year the Iowa State calculated loss per head is just over $30.

• Miracle of miracles the US swine industry defies all basis of economics with expansion of the breeding herd on March 1 compared to December 1. The USDA reports 6.016 million on March 1, 5.999 million on December 1. Our industry faced with record losses expands it doesn’t contract.

The real positive producers can be found in the following states who expanded in the last three months:

Illinois is amazing as according to USDA it added 40,000 sows in three months. We must be an industry that likes to lose money or somehow calculations of losses are misconstrued.

• USDA has the market hog inventory March 1 up 1% from a year ago this year 68.556 million compared to a year ago 67.990 million up about 570,000 head, if it takes 26 weeks from birth to market. Just over 20,000 more a week. Maybe considering the millions of new residents in the last year a zero effect on per capita availability.

In due respect to USDA, they only report what producers tell them they have in inventory. We don’t really believe the breeding herd number. Sow slaughter was running at significantly high numbers last quarter, gilt sales are challenged while sow mortality is running at record levels. It takes a real jump into fantasy to believe Illinois added 40,000 in the last three months in the face of relentless industry financial losses.

Actual

The USDA has been projecting 2.8% more Pork in 2024 than 2023. Let’s look at year to date actual pork production.

The data for first three months seems to be very small difference year over year. Of note 2023 is April 1 data while 2024 is March 30. Factoring that no difference. Do you really believe if we have no more pork in the first quarter, we will have almost 3% more the balance of year? Resilient industry expanding in face of historically high economic losses.

Since the end of December when year over year weights were 2.6 lbs. heavier until March 23 weights have declined 2.9 lbs. This in itself means hogs got more current in last quarter but despite this total pork production is similar year over year.

• Exports – last week US Pork Exports were reported to be 55,300 metric tonnes. A marketing year high. Sales have been running in low 30,000 a week range. Thank God for Mexico 32,800 MT sales last week, second highest ever recorded. We understand from our Mexican contacts their herd is down over 100,000 sows, we expect exports to Mexico to stay strong.

• Productivity – litter size seems to be growing fast. We expect mainly due to lower PRRS incidence that data seems to confirm. PRRS comes back we could see a productivity drop. Gene edited pigs that are supposed to minimize PRRS become less valuable as PRRS levels decline. Have you ever noticed some diseases seem to run their course i.e., Atrophic Rhinitis, Coronavirus, TGE, APP, not sure why but appears they do. Is PRRS on its way out as major issue?

Summary

We are sceptical of US March 1 breeding herd we expect it's actually down 10’s of thousands. No more Pork this last quarter compared to a year ago. We remain sceptical USDA is correct with an almost 3% projection of more pork in 2024. We expect all hogs in 2024 will be selling higher than their future months now project.