Market analysts think the number of US hogs rose during the December-through-February quarter from the same period a year ago as feed became more affordable and higher prices encouraged herd growth, according to a Reuters survey.
The survey predates Friday’s quarterly hogs and pigs report, which is released at 3:00 pm EDT.
Survey respondents expected the report to show a March 1 herd of 65.676 million head, up 6.8% from 62.9 million in the year-ago quarter.
If the predictions are accurate, the rising number of hogs will begin to confirm USDA estimates of rising pork production this year. In its March 10 World Agricultural Supply and Demand Estimates, the USDA projected 2015 pork production of 24.120 billion pounds, up 1.276 billion, or 5.59%, from 2014’s 22.844 billion. It also rises above projected beef production.
BREAKING DOWN THE NUMBERS
But looking at pork production alone tells only part of the story. Weekly statistics from the USDA show that total hog slaughter this year has remained above last year and the previous five-year average.
Of that, barrow and gilt slaughter also is running above last year and the average while sow slaughter is below. Virtually all of the chops, butt roasts and hams seen in the grocery store come from barrow and gilt slaughter. Lesser cuts, trimmings and sows are ground into sausage but still comprise a significant part of total pork production.
The slower sow slaughter shows that producers are keeping them for another litter or two of pigs before cycling them out, and leads to the survey predictions of a 3.6% increase in sows and gilts on hand for breeding as of March 1.
Besides having more barrows and gilts in the slaughter mix, their weight at slaughter continues to rise, which leads to more pork production. USDA data show carcass weights last week averaging 212 pounds, up one from the same week last year but up eight, or 3.92% from the previous five-year average of 204 pounds.
FUTURES SLIDE
As more and heavier hogs come to market, prices continue to slide. CME futures prices for the Apr contract have declined since mid-November when USDA baseline projections predicted increased hog and pork production for 2015. The most recent low occurred on Friday at $57.90 per cwt, a decline of $36.20, or 38.5%, from the high on Nov. 17 of $94.10
Those lower hog prices have been cited for pressuring cattle prices over the period, but short supplies and stable demand have supported beef anyway. Many analysts say beef and cattle markets will slide as more pork and chicken hit the retail market with lower prices.
CASH CATTLE REMAIN QUIET
Cash cattle markets Wednesday remained quiet as packers refused to post a bid and asking prices held at mostly $166 per cwt on a live basis and mostly $266 in Nebraska’s dressed market. Cattle last week were steady/firm at $161 to mostly $163 per cwt live and $258 to $260 dressed.
Boxed beef prices were sharply higher Wednesday with the USDA’s choice cutout up $3.68 per cwt at $250.51 and select up $2.36 to $247.14. Volume was moderate, with 107 loads of fabricated product sold into the spot market.
The choice/select spread widened to $3.36, and weekly data indicate the spread is beginning to widen seasonally and likely will move to a summer high of $11.00 to $13.00.
The CME Feeder Cattle Index for the seven days ended Tuesday was $216.90 per cwt, up $0.67. Mar futures, which expires today, settled Wednesday at $217.70, up $0.52.