On Thursday, Dec. 20, the USDA released the December Quarterly Hogs and Pigs report which illustrated consistent growth of the U.S. hog herd. While many of the inventory numbers were slightly lower than the record numbers from the September report, many of the key categories continue to show remarkable growth. These categories include: sow efficiency (pigs per litter), sows farrowing and the pig crop.
All three categories exhibited strong YoY gains. Since the U.S. hog herd suffered large mortality rates in 2014 from the PED virus, the rebuilding stage has been nothing short of remarkable. Supported by superior genetics that have propelled sow efficiency to record levels, the U.S. reported hog herd on December 1 is the largest since 1990.
What do all of these numbers really mean?
As long as producer and packing margins remain strong there is limited need to slow the expansion. There is an abundance of competitively priced feed inputs, and packer margins remain firm. The renegotiation of NAFTA provided U.S. pork enhanced access to the Mexican market. Meaning that the open market access that the U.S. pork industry enjoys should support demand and keep the herd growing, which supports corn, DDG and soybean meal demand.
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