US hog inventory on the rise; margins remain tight

The latest quarterly hogs and pigs report from USDA showed an increase in U.S. numbers.

Inventory as of Sept. 1 was pegged at 76.5 million head, up slightly from September 2023 and up 2% from June 1. In Illinois, all hogs and pigs totaled 5.6 million head, down 3% since June but up 2% compared to last year.

During a webinar hosted by the National Pork Board after the report was released Sept. 26, Brett Stuart with Global AgriTrends said there is potential for swine numbers to continue to rise.

“The WASDE (World Agricultural Supply and Demand Estimates) report shows 2024 pork production up 2.7%,” he said. “If we were up 1.1% in the first half, that means to get to the WASDE number, we’re going to be up 4.3% in the second half of the year.”

Stuart said given those estimates, the hog industry could be looking at larger production going into the fourth quarter.

The September report placed breeding inventory at 6.04 million head, down 2% from last year, but up 1% from the previous quarter. The breeding inventory in Illinois, 650,000 head, was down 20,000 from last year.

Market hog inventory (70.4 million head) was up 1% from last year and 2% from last quarter nationwide and up 2% in Illinois at 4.95 million head.

The report also showed increases in some of the higher weight classes for market hogs.

“I think it’s important to keep in mind as we’re seeing cheaper feed costs, that could have implications for continuing those higher weights,” said Lee Schulz, economist at Iowa State University. “And we may see some adjustments when we think about market timing as we go forward.”

Schulz said ISU profitability models are patchy as the industry comes off several months of modest profits.

“As you look at some of the seasonally higher prices, our model shows the next couple of months could continue to see some modest profits to break-even levels,” he said. “But getting into some red ink as we get into the fourth quarter and into winter.”

Profitability could then resume next spring.

“On average for 2025, we see some modest profits but there is still significant variability across those profit levels, providing a lot of risk for producers,” Schulz said. “But I’ll also highlight the market currently is offering some opportunity with some profitable prices at times remaining this year.”