United States hog inventory up seven percent

United States inventory of all hogs and pigs on March 1 was 65.9 million head, the United States Department of Agriculture said Friday

That was up seven percent from March 1, 2014, but down slightly from Dec. 1, 2014.

That was within the range of trade expectations.

“The report is short-term bearish and long-term bullish,” said University of Missouri economist Ron Plain. He cited the huge year-over-year jump in the market hog inventory  versus a smaller-than-expected breeding herd number.

The market hog result was likely a result of more pigs that survived PEDv than anticipated, he said.

Don Roose, an analyst with Iowa-based U.S. Commodities, said Friday’s government data sent a signal that the industry is in “full blown” expansion mode.

But, he said, that growth slowed down based on the surprising two percent decline in the June-August farrowing figure. Farrowings refer to the number of sows that are expected to give birth.

Friday’s USDA survey suggest plentiful supplies through the summer, which could pressure nearby Chicago Mercantile Exchange lean hog futures on Monday, analysts said. Deferred hog contracts could gain based on easing production beginning in late summer 2015, they said.

“The key to the report is how much of it is dialed in after CME hog futures’ dramatic selloff in recent weeks in anticipation of bearish data,” said Roose.

The breeding inventory, at 5.98 million head, was up two percent from last year, and up one percent from the previous quarter.

The trade expected on average a 3.6 percent increase from last year. The range of trade forecasts was 2.4 to 4.6 percent, according to a Reuters poll.

Market hog inventory, at 60 million head, was up eight percent from last year, but down slightly from last quarter.

That was within the range of expectations. The average pre-report guess was a 7.2 percent increase from last year.

The December 2014 – February 2015 pig crop, at 28.8 million head, was up nine percent from 2014.

That matched the trade’s expectations

Sows farrowing during this period totaled 2.83 million head, up two percent from 2014.

The sows farrowed during this quarter represented 48 percent of the breeding herd.

The average pigs saved per litter was a record high 10.17 for the Dec.-Feb. period, compared to 9.53 last year.

Pigs saved per litter by size of operation ranged from 7.90 for operations up to 99 hogs and pigs to 10.20 for operations with more than 5,000 hogs and pigs.

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