By Jason Franken
The USDA’s December Hogs and Pigs report places the December 1 inventory of all hogs and pigs at 75.8 million head, down 0.8% from last quarter but up 0.5% from last year, compared to an average trade expectation of 0.2% higher. The slightly higher total is driven by a 0.5% year-over-year increase in market hogs, also expected to be 0.2% higher, while the breeding herd increased by 0.1% from the prior year, as expected. The main surprise is a record September-November pig crop, up more than 2.0% from a year ago and just above the upper end of the range of pre-report expectations, as a 0.2% cut in sows farrowed was more than offset by 11.92 pigs per litter, up 2.3% from last year’s record for the period, continuing the upward trend in pigs per litter. While this level of productivity growth took the trade by surprise, in part because it is difficult to continually break records by large margins, further productivity growth is feasible, as Denmark is recently averaging around 15 pigs per litter.
For market hogs, the 180-pound-and-over weight class is down 0.5% from a year ago compared to expectations of 1% lower, while the 120-to-179-pound group is down about 0.6%, as expected, which suggests a fairly neutral price outlook near-term, as much of the heaviest class has already gone to slaughter. The under-50-pounds and 50-to-119 pounds weight classes are up 1.2% and 1.4%, respectively, from last year, compared to pre-report expectations of 0.7% and 0.5% higher, and these greater than expected increases are a bit bearish for the mid-term. Still, there are just 0.8% more hogs weighing under 180 pounds than a year ago, which will arrive at processing plants from January to May 2025, implying similar supplies as last year for the period overall. The greater than anticipated increases in inventories of lighter weight hogs stems from the unanticipated record September-November pig crop, which also indicates bearishly higher slaughter levels for April through June. Respective slaughter levels should be similar to last year for July through September and higher for the remainder of 2025, given farrowing intentions for this winter nearly identical to actual farrowings a year ago and those for spring at about 1.4% higher and more than expected. However, this all depends on whether current trends in pigs per litter persist.
Cold stocks of pork remain well below pre-Covid-19 pandemic levels. According to the USDA cold storage report, cold stocks of pork on November 30 are down 8% from the prior month and 6% from a year ago. Meanwhile, poultry stocks are down 9% from the prior month and 7% from a year ago, while beef is up 2% from the prior month but down 4% from last year.