Hog Report Seen Neutral

The US hog market was not shocked to see the numbers in Friday’s USDA Quarterly Hogs and Pigs report.  The numbers appear to be very close to industry estimates, and much of the information may already be baked into the market.

The inventory of all hogs and pigs on March 1 was 67.6 million head, up 245,000, or 0.36%, from 67.4 million a year ago.  It also was the largest March 1 inventory of hogs on record going back to 1988 when the USDA began counting, slightly eclipsing last year’s record of 67.400 million.

The March 1 inventory, however, was not the largest for any quarter.  That honor goes to the revised Sep. 1, 2015, inventory of 69.185 million.

The December all hogs report was revised upward by 90,000 head, or 0.1%, to 68.389 million from the initial estimate of 68.299 million, making the net change over the last quarter up 725,000 head, or 1.06%.

The number of hogs kept for breeding was 5.980 million, down 2,000, or 0.03%, from 5.982 million a year earlier.  It was the eighth lowest March 1 inventory of breeding animals since 1988.

The count of all hogs being readied for slaughter was 61.664 million head, up 246,000, or 0.40%, from 61.418 million a year earlier, and the largest on record for March 1.




The latest quarterly pig crop was reported at 29.582 million head, down 45,000, or 0.15%, from 29.627 million in 2015.  However, this is up 3.256 million, or 12.4%, from 26.326 million in 2014 and is the second largest on record bowing to 2015’s total.

US hog producers have been able to produce more pork with fewer sows because of larger and larger litters and an increase in the number of these baby pigs saved.  And the number of pigs per litter goes up with the size of the operation to 10.4 for herds of 5,000 or more from 7.90 for herds with one to 99 head.




But while total inventories likely are in the market already, hog markets could see some pressure from a tendency for market hog weights to be larger than a year earlier.  The number of hogs weighing 180 pounds or more as of March 1 was 11.274 million, up 0.17% from 11.255 million a year earlier.

That’s not much, except that the number of market hogs weighing 120 to 179 pounds also is up 1.21% to 13.744 million from 13.580 million, and those weighing 50 to 119 pounds was up 0.78% to 17.263 million from 17.129 million.

Only those weighing 50 pounds or less showed a decline in numbers, going down 0.07% to 19.382 million from 19.454 million.




Cash cattle trading last week was $3 to $4 lower at mostly $136 per cwt on a live basis and off $ to to $4 on a dressed basis at mostly $218.

The USDA’s choice cutout price Friday was down $0.48 per cwt at $224.36, while the select cutout was off $2.42 at $214.89.  The choice/select spread widened to $9.47 from $7.53, and 96 loads of fabricated product were sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $162.03 per cwt, down $1.07.  This compares with the Mar futures close Thursday of $160.97, down $0.42.