US Hog Inventory Likely Increased Over the last year – 03/01/2023
We estimate the US hog inventory on March 1, 2023 at 75 million head, up 2% from the previous count. We have based our assumption for the December/February pig crop, which is the major unknown in calculating the first quarter hog balance, on USDA’s December sows farrowing survey and trend pigs per litter.
The hog/corn price ratio, a rough indicator of hog production profitability, averaged less than 12 last quarter (December/February) which is at the low end of the previous 25 year historic range. Farmers also had to contend with near $500/ton soybean meal costs last quarter. Increased productivity, as expressed in the positive trend in the number of pigs saved per litter over the last twenty five years means farmers are better off than the raw ratios data would suggest. Still hog enterprise profitability is mediocre at best and does not suggest a major expansion in US hog numbers over the next 12 months.
Summer hog futures prices have significant upside potential based on USDA’s February 2023 pork supply/usage forecast
| US Hog Balance Dec/Feb Million head | ||||
| 2020 | 2021 | 2022 | 2023 | |
| Dec 1 | 78.2 | 77.3 | 74.4 | 73.1 |
|
Dec/Feb Pig crop
|
35.0 | 32.1 | 31.9 | 32.4 |
| Net imports | 1.3 | 1.5 | 1.6 | 1.3 |
| Supply | 114.6 | 110.9 | 108.0 | 106.8 |
| Slaughter | 33.9 | 34.2 | 31.4 | 32.2 |
| Residual | 5.5 | 2.8 | 3.2 | 3.2 |
| March 1 | 75.2 | 73.9 | 73.4 | 75.2 |
| Breeding | 6.4 | 6.2 | 6.1 | 6.1 |
| Market | 68.7 | 67.7 | 66.6 | 69.0 |
| US All Hogs – 2023 based on data available in early March | ||||