Hog Supplies Tighten as Prices Ease, Production Holds Steady

The USDA’s latest Hogs and Pigs Report caught some analysts off guard. Inventories came in lower than expected, signaling tighter supplies ahead, even as producers return to profitability this year.

NASHVILLE, Tenn. (RFD-TV) — Hog prices are easing slightly with Western Cornbelt caracasses down from the previous week. Pork producer profits have narrowed to about $64 per head, but margins remain in the black, and packers continue to run near full capacity, with utilization around 97 percent. Even with lower cutout values and feed costs, analysts say demand for pork remains steady and supplies are strong.

The latest Hogs and Pigs Report from the U.S. Department of Agriculture (USDA) caught some analysts off guard. Inventories came in lower than expected, signaling tighter supplies ahead, even as producers return to profitability this year.

“That gave us inventories as of September 1 and then helped us kind of project those numbers six months to a year ahead, as we kind of look at those slaughter supplies and kind of anticipate what those numbers are,’ said xxx. “And to summarize that report, you know, I would put it in the category of a bit of a shocker, because not only did we see numbers below a year ago, which was a little bit of a surprise, but compared to pre-report expectations, as there’s about seven analysts that were asked about, you know, what they expected the numbers to be, and USDA came in much lower than those numbers.”

That surprise has ripple effects across the market, with forecasts shifting as analysts weigh the latest numbers against producer demand.

Related Stories
CME Group’s Fred Seamon joins us to break down the drop in farmer sentiment, discuss the role of input costs and global factors, and share his outlook for the ag economy ahead.
Flour milling demand stayed generally steady, but total wheat grind remained slightly softer year over year.
Tyson is still reshaping its beef footprint.
Cotton prices improved last week, but drought, storms, and uneven planting are keeping risk elevated.

LATEST STORIES BY THIS AUTHOR:

Rep. Adrian Smith joins us to discuss the push for nationwide year-round E15 sales and legislative hurdles for getting it into the farm bill.
The Supreme Court’s ruling could affect pesticide warning claims well beyond Roundup. Richard Gupton with the Ag Retailers Association joins us to explain the importance of federal pesticide labeling standards and discuss the potential impact on the ag industry and supply chain.
Farm Credit’s Christy Seyfert joined us to discuss the ag industry’s push for swift Farm Bill action as it heads toward a House vote.
Bridge payments are helping, but many producers still face losses and tight margins. AEM’s Curt Blades joins us to discuss how the current farm economy is pressuring equipment demand.
Feed demand and premiums drive growth for the crop
Purdue economist Dr. Joana Colussi discussed the U.S. and Brazil’s reliance on imported fertilizers and their impact on global food security amid rising input costs.