Hog Report Points to Increase in US Pork Production

USDA estimated the June 1, 2024 Hog herd at 74.5 million head, a 1% increase from a year ago. Market hogs were up 2% on a year over year basis. Earlier this month USDA estimated US pork production during the second half of 2024 would increase 5% on a year over year basis which appears moderately high  compared to the 3% increase forecast by using original market hog data and net live hog imports to forecast July/December 2024 US commercial hog slaughter and pork production. The USDA forecast is within the standard deviation of the described model. We have used the USDA pork production forecast in the accompanying chart. 

December lean hogs would be forecast to make a low of less than $60 based on USDA’s pork production forecast. A 3% increase would suggest a low, basis the December hog contract, of  between $60 and $65. Seasonally, cash hogs prices often make a low in the late fall which explains the major discount for December hogs compared to the current cash price of just under $90. Applying the seasonal factor to the December lean contract would provide a July/December  forecast range of $59 to $76.