H&P Report: Negative Compared to Expectations

March 28, 2014 09:38 AM
 

 

 

USDA's quarterly snout count shows the U.S. hog inventory down 3% from year-ago at 62.899 million head. However, that was at the very top of the pre-report guess range and 1.4 million head more than the average guess implied traders were expecting. The breeding herd at 100%, the market hog inventory at 96% and the winter pig crop at 97% also each topped the pre-report trade guesses. As a result, the data is negative compared to expectations and is expected to weigh on hog futures Monday.

Quarterly
H&P Report

USDA

Avg. trade guess

Range

 

% of year-ago

All Hogs and Pigs

97

94.5

92.0-97.1

Kept for breeding

100

99.6

98.9-100.7

Kept for marketing

96

94.0

91.2-96.9

Dec.-Feb. pig crop

97

96.5

90.8-101.4

Dec.-Feb. pigs per litter

95

96.7

92.9-99.8

Dec.-Feb. farrowings

103

100.0

97.8-101.3

Mar.-May farrowing int.

102

100.8

99.4-102.0

June-Aug. farrowing int.

102

101.2

99.7-102.0

Hogs under 50 lbs.

96

93.0

87.7-98.9

Hogs 50 to 119 lbs.

97

94.1

91.0-97.8

Hogs 120 to 179 lbs.

97

94.3

92.3-98.1

Hogs 180 and over

95

95.4

93.9-97.3

 

A breakdown of market hog weights suggests hog slaughter will run roughly 3% to 4% under year-ago in the coming months. That would be less than the current year-to-date pace, which is 7% under year-ago. That makes us wonder if USDA's data didn't catch all of the losses from porcine epidemic diarrhea virus (PEDV), in which case slaughter would run even more below year-ago than USDA's numbers imply.

In response to record hog prices, producers intend to expand their herds. Winter farrowings are up 3% from year-ago, while spring and summer farrowing intentions are 2% higher than last year. But pigs per litter at 9.53 head were down 5% from year-ago -- the first drop in that category in a long time. That's directly related to PEDV. Because PEDV is ongoing, it's safe to say the planned expansion isn't likely going to make up for death losses.

On revisions to past data, USDA says, "All inventory and pig crop estimates for March 2013 through December 2013 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. Based on the findings of this review, an adjustment of less than one half of one percent was made to the September 2013 total inventory. An adjustment of less than one half of one percent was made to the December 2013 total inventory. An adjustment of less than one percent was made to the June-August 2013 pig crop." Those revisions amounted to a 320,000-head decline in the Sept. 1, 2013, inventory; an 85,000-head increase in the Dec. 1, 2013, hog inventory; and a 229,000-head decline in the June-August 2013 pig crop.

 

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