The USDA’s December Quarterly Hogs and Pigs report indicated that on Dec. 1, the US hog industry was bigger and more productive than it was a year earlier.
For the fifth straight year, the Dec. 1 inventory of marketing hogs was the highest since the series began in 1963, at almost 71 million head, 3.1% more than a year earlier.
BREEDING HERD UP
The breeding inventory rose more than 2% from a year earlier, making it the 15th straight year-over-year quarterly breeding-herd increase. The last time the breeding inventory showed a decline was in March of 2016.
The US swine breeding herd has not shown a significant, sustained contraction since the period between June 2008 and December 2010. The latest breeding inventory expansion has largely been driven by the construction of three large processing facilities and the refurbishment of a mid-sized plant, in three Midwestern states.
Those facilities together contributed to the increase in weekly US hog slaughter capacity from about 2.5 million head in 2015 to more than 2.8 million in the fall of 2019. In addition, optimism over potential expansion in exports may be fueling recent inventory growth.
LITTER SIZES GROW
The December report indicated that the US hog industry had achieved a third straight quarterly litter rate of 11 or more pigs per litter. National litter rates of 11 pigs per litter or more had been a longtime goal of the hog industry, although such litter rates have been commonplace in Canada (particularly in Manitoba) and in Europe for quite some time.
The September-November litter rate was 11.09 pigs per litter; the June-August litter rate was 11.11, and the March-May rate was 11.
Factors contributing to the 11+ litter rates were varied. They included innovations in pre- and post-natal sow and weanling management and care, sow nutrition, weather adaptations and disease management.
Chief among litter-rate enhancement factors were thought to be improvements in genetics. Superior litter rates in 2019 likely indicated that distribution and optimal utilization of high-quality genetics was gaining traction in the industry.
USDA state-level litter rate data indicated that of the 10 states with the largest breeding inventories on Dec. 1, 2018, five had achieved 11+ litter rates in 2019 or earlier. Litter rates of the remaining five major hog breeding states continued to lag.
It is likely that as moderately productive farms continue to adopt superior genetics, state-level litter rate averages will move higher. Higher state-level pigs-per-litter scores will translate into higher national litter-rate averages.
The adoption of high-quality genetics by moderately productive commercial farms likely will be an important source of US hog industry productivity growth going forward.
Incorporation of 2018 and 2019 inventory revisions into 2020 production expectations, along with NASS producer farrowing intentions for the first half of 2020, points to 2020 pork production of 28.6 billion pounds, an increase of almost 4% compared with 2019.
CATTLE, BEEF RECAP
Cash cattle trading took place in the Plains last week at mostly $124 per cwt on a live basis, with a few up to $124.50, generally steady to down $1.50. Dressed-basis trading was reported at $198 to $199 per cwt, down $1 to $2.
The USDA choice cutout Tuesday was down $0.13 per cwt at $214.51, while select was off $0.01 at $213.47. The choice/select spread narrowed to $1.04 from $1.16 with 89 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday was $145.46 per cwt, down $0.23. This compares with Tuesday’s Jan contract settlement of $145.07, down $0.27.