USDA's June Hogs and Pigs Report Could Send More Supply Shocks to the Market
AgDay 06/23/21 - PORK
Pork producers could see another supply shock in USDA’s quarterly Hogs and Pigs Report (H&P) set for release Thursday.
The last report was issued in March and it produced surprises when it came to U.S. hog supplies. The headline was an unexpected drop in the number of sows on U.S. farms, down 3% from a year earlier.
Other highlights from the March H&P report included:
- U.S. inventory at 74.8 million head, down 2% from March 2020;
- Breeding inventory at 6.21 million head, down 3% from 2020;
- Hog producers intending to have just over 3 million sows farrow from now until May, down 3% from same period in 2020.
And as the pork industry continues to get a grasp on the total impacts the COVID-19 pandemic had on hog production across the U.S., one analyst says Thursday’s report could reveal even more details.
"I think we are still fully trying to get a handle on that pandemic," says Joe Kerns, with Partners for Production Agriculture. "We dropped a very big rock into a small pond and the ripples are going to continue. They're not going to abate for quite some time."
Kerns says the data Thursday will be a bit tricky to assess, as the says the year-over-year comparison will show numbers much different this June from June 2020 when pork producers were in the middle of the meat processing crisis.
"This upcoming June report will be the first one that's kind of on the back of june of 2020, when we started to really disrupt things," adds Kerns. "So the year over year comparison is going to be next to impossible. And I think we're in for that for the next four quarters. So, users of that data, I want to caution you about the year over year comparison and while these findings are something meaningful, I think we're still in a very favorable environment. I don't believe that we've produced ourselves out of prosperity, and i'm looking for good times to maintain for quite some time."
Just after USDA released its March numbers, Scott Brown, an economist with the University of Missouri, said the report set the stage for the possibility of higher hog prices throughout 2021.
"The fact that we actually have talked about roughly 165,000 fewer sows than where we were a year ago, at this time, puts us in a much better situation on the supply side," Brown said in July. "It's always hard to get us to reduce sows when we have such a large capital outlay in this industry. That coupled with less market hog inventory, to me makes things more bullish in terms of where we go as we move forward here in 2021.”
Analysts across the pork industry say the industry may be trying to get a handle on actual hogs and pigs numbers for another year, as there's no accurate count of just how many animals were lost during the major processing plant bottlenecks at the height of the pandemic. Even though many producers were successful at changing feed rations and slow pigs’ rate of gain, a move that was due to pork producers pivoting so quickly to help ease losses, analysts say there were still some producers who were forced to use their last resort options.
USDA will release the June hogs and pigs report will be released at 3 p.m. CT on Thursday, June 24, 2021.
