Showing posts with the label Mexico

Hog Numbers are Up & Profits Should Come

The number of hogs being raised in the U.S. has been going up since mid–2014. However, it isn’t necessarily because profits are great.

The last Hogs and Pigs report released by USDA, back in December, was a record-setter at 77 million 338 thousand. That’s three-percent more than year ago. The expansion comes despite unprofitable margins and uncertainties related to trade issues says Jason Franken of Western Illinois University. The fact is there will be more hogs going to market from January to May. One of the reasons, Franken says, is that the litter size has grown on average and is now over 11 piglets per sow, “The continuation of the upward trend in pigs per litter, combined with reported farrowing intentions suggests more hogs going to market in 2020.”

Winter farrowing intentions are up 1 percent from actual farrowings last year and 5% from two years ago. The spring farrowing intentions are also up slightly from last year and up 3 percent from 2 years back.

All of these numbers point to a somewhat higher supply of hogs and pork in 2020 thinks Franken. And, he says, with higher production, one might expect lower prices, but there are additional items to consider on the demand side. For instance, we’re eating more pork per person. Last year’s mark at 52.7 pounds each is the highest number since 1981. Exports are good, too, even to China, “On the world market, all eyes are on Asia, and China in particular, due to their production losses from African Swine Fever. Although held back by China’s retaliatory duties, U.S. pork exports to China increased throughout 2019. In September and October, China surpassed Japan to become our second largest foreign customer after Mexico.”

USDA, by-the-way, is forecasting U.S. pork exports in the first three quarters of 2020 to be 21%, 7.5%, and 8.8% greater than the corresponding quarters from last year. Taking all of this into account, WIU’s Jason Franken says hog prices should be profitable throughout much of 2020, even though they have been below the cost of production in recent weeks, as they often are seasonally at this time of year.