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USDA hogs and pigs update shows larger than expected herd

USDA’s quarterly hogs and pigs report showed slower than expected herd contraction.

According to Brownfield analyst David Kohli, the numbers look neutral to negative for summer CME lean hog contracts.

All hogs and pigs as of December 1 were down 2% on the year at 65.807 million head with marketings also down 2% at 59.957 million and the breeding herd 3% below a year ago at 5.850 million head. Before the report, the total herd was expected to be down 2.4%, breeding hogs were seen as 3.4% below a year ago and marketings were expected to see a 2.3% reduction.

All market hog weight groups were down 2% from last year, estimates ranged from a 1.9% to 2.3% decline, depending on category. This was USDA’s first update using under 50 pound and 50 to 119 pound categories instead of under 60 pound and 60 to 119 pound categories to better reflect the current state of the North American hog market. The September to November pig crop was unchanged when the trade was expecting a 1.9% increase and farrowings for that period were 2% below last year, compared to the average estimate for a 3.1% cut.

December to February farrowing intentions were 2% under a year ago and March to May intentions were down 1%, both smaller than expected. Ahead of the report, the average estimate for December to February farrowing intentions was 96.8% of a year ago and March to May intentions were seen at 97.0%.

The next quarterly update is out March 26.