The USDA’s Quarterly Hogs and Pigs report Friday was called bearish to futures prices Monday after its release.
Market watchers were thought to be looking at a Sep. 1 inventory that grew less than 3% from the same time last year, but it was more than 3% and at the high end of expectations, trade sources said. The inventory of breeding stock also was slightly higher than expected, and hogs in the heaviest reported weight category were up 8% from last year and was the highest since the report began in 1988.
TOTAL HERD RECORD HIGH
The US inventory of all hogs and pigs on Sep. 1 was listed at 77.678 million head, up 1.978 million, or 2.61% from 75.700 million on June 1 and up 2.542 million, or 3.39% from 75.136 million a year earlier.
According to records kept by the Livestock Marketing Information Center, the Sep. 1 inventory of all US hogs and pigs has grown every year since its most recent bottom at 65.854 million in 2014. The average rate of growth over the six-year period has been 3.36%, making this latest year-over-year increase only slightly less.
And looking at those growth rates, it would not be out of line to expect further herd growth next year, a market analyst said. However, a dip in planned farrowing rates next quarter could limit the annual gains somewhat.
BREEDING HERD MARKES SEVENTH STRAIGHT GAIN
The total breeding herd as of Sep. 1 was listed at 6.431 million head, up 12,000, or 0.19%, from 6.419 million on June 1 and up 101,000, or 1.60%, from 6.330 million a year earlier.
LMIC records shows that the Sep. 1 breeding herd inventory made its latest low in 2012 at 5.788 million head and has grown every year since then to a point that is the highest since Sep. 1, 1998, when it was 6.875 million.
Since its latest Sep. 1 low of 5.788 million in 2012, the US breeding herd has increased by a year-over-year average of 1.52%, making the latest increase more than the latest seven-year average.
The number of sows that farrowed in the June-August quarter was listed at 3.179 million, up 71,000, or 2.28%, from 3.108 million in the March-through-May period, and up 21,000, or 0.66%, from 3.200 million in the year-earlier quarter.
Farmers were able to keep 11.11 pigs per litter alive, up 0.11 head, or 1.00%, from 11.00 in the previous quarter and up 0.39 head, or 3.64%, from 10.72 in the year-earlier quarter.
That resulted in a quarterly pig crop of 35.306 million head, up 1.129 million, or 3.30%, from 34.177 million in the March-May quarter and up 986,000, or 2.87%, from 34.320 million in the year-earlier quarter.
Producers have 3.155 million sows scheduled to farrow in the September-through-November quarter, compared with 3.174 million a year earlier and 3.103 million in the 2017 quarter.
CATTLE, BEEF RECAP
Cash cattle trade took place in the Plains last week at $103 up to $107 per cwt on a live basis, up $3 from the previous week, and at mostly $165 per cwt on a dressed basis, steady to up $5.
The USDA choice cutout Friday was down $0.93 per cwt at $212.58, while select was down $0.53 at $189.86. The choice/select spread narrowed to $22.72 from $23.12 with 75 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Thursday was $141.77 per cwt, up $0.63 from the previous day. This compares with Friday’s Oct contract settlement of $144.32, up $1.22.