H&P Report: Friendly Versus Pre-report Expectations

December 27, 2013 09:04 AM
 

The Dec. 1 U.S. hog inventory at 65.940 million head came in roughly 368,000 head under the average pre-report guess. The Kept for Breeding and Kept for Marketing categories were both down around 1% from year-ago. The September-November pig crop at 29.298 head was roughly 20,000 head fewer than traders anticipated.

Quarterly H&P Report

USDA

Avg. trade guess

Range

 

% of year-ago

All Hogs and Pigs

99

99.9

98.6-101.0

Kept for breeding

99

101.0

100.2-101.9

Kept for marketing

99

99.8

98.4-101.1

Sept.-Nov. pig crop

100

101.2

99.1-102.7

Sept.-Nov. pigs per litter

101

100.8

98.7-102.4

Sept.-Nov. farrowings

100

100.4

100.1-100.6

Dec.-Feb. farrowing int.

101

100.9

100.5-101.8

Mar.-May farrowing int.

101

101.2

97.6-102.0

Hogs under 50 lbs.

99

99.7

97.8-101.4

Hogs 50 to 119 lbs.

100

99.7

98.6-101.4

Hogs 120-179

100

99.9

98.1-101.3

Hogs 180 and over

100

100.1

99.2-101.1

Looking forward, hog producers intend to increase farrowings roughly 1% through winter and spring. That's not a surprise given lower feed costs, especially since they failed to trim their hog herds during the extended period of record-high feed prices. But if that 1% increase in farrowings is seen, it points to an even greater increase in the pig crop given continued year-over-year gains in the number of pigs per litter. The unknown remains how much porcine epidemic diarrhea virus (PEDV) will impact hog numbers.

USDA made revisions to past data, as well. USDA says, "All inventory and pig crop estimates for March 2012 through September 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 0.5% was made to the March 2012 total inventory and an adjustment of less than 2.5% was made to the December 2011-February 2012 pig crop. An adjustment of less than 1.5% was made to the June 2012 total inventory and an adjustment of less than 1.5% was made to the March-May 2012 pig crop.

"An adjustment of less than 1.5% was made to the March 2013 total inventory and an adjustment of less than 3.5% was made to the December 2012-February 2013 pig crop. An adjustment of less than 2.5% was made to the June 2013 total inventory. An adjustment of less than 2% was made to the September 2013 total inventory. An adjustment of more than 3.5% was made to the March-May 2013 pig crop."

Bottom line on USDA's revisions is that they are bullish. Market hog numbers were revised down for the Dec.-Feb. period for the past two years. Dec. 11 to May 2012 pig crop was revised down 1.4% from the September 2013 Hogs & Pigs Report. The December 2012 to May 2013 pig crop was revised down 2.8%. Those are major revisions.

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