So here’s the lowdown on the Hogs and Pigs report, which came out moments ago:
The U.S. breeding herd is down three percent from last year and two percent from the last quarter. So sow liquidation is happening but not at a torrential pace. We need a torrent, not a trickle.
Market hog inventories are up one percent from last quarter, but down two percent from last year.
Sows had a record born-alive rate in the June to August period – something that will bring more pigs to market in half a year and a continuation of the trend of increased sow productivity.
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
Americans intend to farrow three percent fewer sows from September to December than last year, and five percent less than two years ago. With productivity gains, that will be less than a three percent reduction in pork.
So this is not a huge happy surprise for us, but a predicted minimal reduction in U.S. sow numbers. We’ll need a few more months like this to squeeze enough sows out of the system so that we can get our 10 percent overall reduction and likely return to profitability.
