DES MOINES, Iowa — U.S. hog producers set another record in
productivity as they managed to save an average of 10.31 pigs per litter for the
second quarter. That number surpasses the former pigs saved per litter of 10.15.
“Hog producers are just getting better at what they do in
managing and caring for those sows and young pigs,” said Ron Plain, Extension
economist at the University of Missouri at Columbia.
He was one of three industry experts who commented during a
media call sponsored by the National Pork Board following the release of the
U.S. Department of Agriculture Hogs and Pigs Report on June 28.
“We’ve been on a streak with that number being up,” he said.
“USDA also gives us a monthly breakout, so if you look at the pigs per litter by
month, March was up 2 percent, April up 2 percent and May up 2.6 percent, so
based on that, there’s no end in sight for continuing improvement in saving more
pigs for each sow that we farrow.”
The numbers, as read by Steve Meyer, president of Paragon
Economics, came in mixed relative to analysts’ pre-report expectations.
All hogs and pigs were at 66.647 million head on June 1,
nearly even with year-ago numbers and smaller than pre-report estimates, which
had that number up six-tenths of a percent.
The breeding herd was at 5.882 million head, up three-tenths
of a percent from a year ago and slightly larger than pre-report estimates,
which predicted that number would be 99.9 percent of the 2012 number.
The market herd was at 60.765 million head, down one tenth
of a percent from a year ago. Analysts predicted that number would be up seven
tenths of a percent.
The March-May sows farrowed was at 2.921 million head, down
2 percent from a year ago. The June-August farrowing intentions were at 2.925
million head, down one tenth from a year ago, and September-November intentions
was at 2.917 million head, up 1 percent from a year ago.
One big question hovering over the U.S. pork industry was
answered earlier in the day, when a USDA acreage report stunned many with a
report of 97.4 million planted acres of corn and a not-so-surprising 77.7
million acres of soybeans planted, both despite continued wet and rainy
conditions in the major Corn Belt states.
“There was another report today, mainly focusing on the corn
acres. Average trade estimates were expecting 1.5 million to 2 million less
acres than the March planting intentions. We actually got 100,000 more acres, so
that price response in the marketplace. If we were to have a normal, kind of
average-yielding crop this year, we’re going to have plenty of corn left over.
We could be very overpriced in corn right now,” said Daniel Bluntzer, director
of research at Frontier Risk Management, based in Corpus Christi, Texas.
Joe Kerns of Kerns and Associates of Ames, Iowa, agreed, but
cautioned that pork producers — and livestock producers in general — will have
some uncertainty to deal with over the next few months.
“We don’t seem to be in a tight situation now, and one of
the other pieces that came out of that earlier report was just how tight the
current stocks are. You’ve got a phenomenon where old crop is moving higher, new
crop is moving significantly lower and the livestock production sector is going
to have to navigate through some very, very difficult waters,” said Kerns, who
also pointed out an unwelcome bit of history.
“We’re approaching a total pig crop that’s near where we
were when we hit some trouble spots back in 2008 and 2009.”
However, Kerns overall was optimistic on the report numbers.
“In general, I’m very optimistic for the foreseeable future
for producer productivity, and based on the numbers we have out today, I don’t
think there’s an uh-oh moment that we’ve discovered in these data,” he
Plain added his own optimism, as well, for the
“Hog producers are back in the black right now, have been
the last several days and, hopefully, there will be a lot more profits ahead of
us and that’s going to lead to more sows farrowing,” he said.
But Plain cautioned that expansion will be measured.
“The big thing that the hog industry and all the livestock
industry, I think, is counting on is some relief in feed costs. More corn and
more bean meal and lower feed costs will certainly help out the bottom line for
producers. How much and whether we’re going to grow faster than the farrowing
intentions report will depend a lot on how far above 14 billion bushels this
fall harvest is and how much of a drop in corn prices we get, but certainly
there’s some potential that we’re going to be up even more in the winter quarter
if we can sustain some profitability,” he said.
Kern said he expects any expansion to be slower than in past
periods of profitability.
“I do think you’re going to see some very judicious and
calculated expansion by the pork industry based on packing capacity. Some of the
negative experiences we’ve had in the past are not so far away that we’ve
forgotten nor have the lenders forgotten. I do think you’re going to be a little
slower than what you might expect of a knee-jerk reaction to the lower corn
prices. Hopefully, we’ll be able to sustain profitability a little longer until
such time as we’d have sufficient plant capacity to justify some further sow
expansion,” he said.
The other question for the U.S. pork industry is an outbreak
of porcine epidemic diarrhea virus. PEDV, which is similar in symptoms to
transmissible gastro enteritis, was confirmed on a farm in Ohio the week of
Since then, the virus has spread to almost 200 farm sites
over 13 states. Authorities haven’t been able to identify how the virus entered
the U.S. herd.
“What we know about this thing, we’ve got about 200
confirmed premises as of June 10 and apparently there’s some information this
week of another 40 or 50 confirmed premises. If you do the math on it, even if
those are pretty large sow farms and pretty productive sow farms, so far, the
losses have not been huge,” Meyer said.
As industry officials and swine veterinarians urge
stepped-up biosecurity measures at farm sites to try to control the spread of
the virus, Meyer said how far the virus will spread is a big question mark.
“Obviously, the key on this is — is it going to spread? How
tough is it going to be to control? We have seen this disease in other
countries, so we know how it behaves with immunities and such,” he said.
“I don’t know if we’re going to have a lot of impact, and
we’ll pick that up as we go through September and get the September survey. At
this point, I don’t think there’s much out there, and it probably wouldn’t have
been picked up in this June 1 inventory anyway.”
Meyer noted that the pig crop being affected by PEDV will go
to market in early 2014, so any final impact on numbers would be seen then.
“If we do seem to have somewhat of a hole from PEDV, that’s
going to be in that January timeframe,” he said.
Kerns said producers could add pounds to make up for the
“We’ll respond by adding weight,” he predicted. “We might
market the same amount of pounds — they’ll just have fewer legs.”