Nothing in the U.S. Department of Agriculture’s latest quarterly Hogs and Pigs report suggests U.S. farmers are rebuilding their herds.
So even though traders considered the report slightly bearish in the short term, markets rose after its release because of relief over the breeding herd size.
The combination of feed prices and hog prices is still not producing enough profit to convince hog farmers to boost production.
“The ‘hog crush’ … for 2011 has improved some since March 1 but is still not large enough in our opinion to encourage widespread expansion,” said analysts Steve Meyer and Len Steiner after the report was released March 25.
“The primary limiting factor for hog number expansion remains uncertainty about the 2011 corn crop and resulting feed costs.”
The report found that the U.S. pig herd was 0.6 percent bigger than analysts expected.
As well, farmers plan 2.6 percent fewer farrowings from March to May than they did a year ago, and 2.6 percent less from June to August, which is 2.1 percent less than analysts expected.
