The U.S. hog herd as of Dec. 1 was bigger than analysts expected, notching the highest number since 1943.
The U.S. Department of Agriculture’s quarterly hogs and pigs report said the herd as of Dec. 1 was 71.5 million head, up four percent over last year.
Analysts expected a herd size of 71.1 million.
Pork production is effectively the largest ever because hogs now weigh significantly more than they did in 1943, when the herd reached 83.7 million, said the USDA.
“There’s a much bigger supply of pigs lined up here for the next few months, a lot more hogs to process,” Allendale analyst Rich Nelson told Reuters.
Chicago hog futures, which had rallied for much of December, fell on the report. However, the nearby February contract mostly recovered in the following days as traders implemented bull spreads, in which they buy the nearby contact and sell the deferred contracts.
As of Dec. 29, May was trading about two percent lower than before the report.
The report said the breeding inventory, at 6.09 million head, was up one percent from last year and up one percent from the previous quarter.
Market hog inventory, at 65.4 million head, was up four percent from last year and up slightly from last quarter. The trade, on average, had expected the breeding herd to be up .2 percent and market hogs to be up two percent.
The report said the average pigs saved per litter was a record high 10.63 for September-November, compared to 10.53 last year.
Declines in both hog and cattle futures were minimized by monthly USDA cold storage data showing 520.3 million pounds of pork and 531.5 million lb. of beef in U.S. freezers in November, each below respective analyst estimates of 566.1 million lb. of pork and 544.6 million lb. of beef.
“That clearly shows retailers were more aggressive (selling) beef than trade expectations,” Nelson said.