The USDA released its quarterly Hogs and Pigs report Thursday.
Numbers are up, as expected, and profitability is still possible. For consumers, the supply of high quality meat at favorable prices continues.
The size of the U.S. swine herd reached 73.5 million head, as of September 1. The number of swine is up three percent from last month and two percent from last year. The breeding herd rose one percent from last year and the market hog inventory increased three percent. Analysts are calling these numbers neutral for the trade.
University of Missouri professor emeritus Ron Plain said there may be some red ink for pig farmers this fall, but there is positive news for the industry.
?By in large, the industry is profitable and we?re growing,? Plain said. ?Demand is good, export outlook looks good. We anticipate more pork. Bottom line, the industry is alive and well. Slaughter capacity gives us room to grow production, and I think we?re going to make sure there?s enough hogs to keep employees in the new plants busy.?
Hog slaughter levels broke new records this fall. Packer capacity increased with two significant plants coming on board.
Alton Kalo, senior analyst with Steiner Consulting Group, said there seems to be too much focus on the large production numbers.
?I think we forget the fact that a lot of this pork is actually going to the consumers and is getting used up,? Kalo said. ?Now, it?s taking somewhat lower prices to get that done, but those lower prices have been profitable for the producer. The export markets are absorbing a fair amount of this pork as well. July numbers were a little lower, but they were lower because the prices were pretty high. The demand for pork continues to be pretty good, and I think that?s allowed producers to stay profitable through this expansion.?
Kevin Grier, who leads his own market analysis and consulting firm in Guelph, Ontario, said Canada faces similar expansion. There has been concerns with PED this spring and summer.
?Pretty well all of it has been associated in the province of Manitoba, southeast Manitoba. Its resulted in a decline in feeder pigs heading into Iowa and Minnesota, about 10,000 head/week this summer. Those would have been hitting the market in the fourth quarter. The reality of it is that finishers in Iowa and southern Minnesota certainly noticed the decline in numbers this summer. Orders were not filled this summer,? Grier said.
Grier said the Canadian swine industry is envious of the productivity gains seen in the United States.
