The USDA released the Quarterly Hogs and Pigs Report on Friday and it appears there is going to be a lot more pork than expected. Virtually all the inventory numbers set new records for March. All hogs and pigs came in at 65.909 million head which is 6.5% more than last year and nearly 3% above pre-report estimates. The breeding herd inventory was slightly larger than last year and the market herd saw a jump of 7.2% from last year to 59.77 million head, a much bigger jump than estimates had predicted.
"Those are some big revisions," says Daniel Bluntzer of Frontier Risk Management in Texas. "I think the interesting thing is the actual farrowings were up about 2.5% from what we thought it was which obviously increases the pig crop. What we're really saying is that the efficiency is going up so it looks like our supply is going to be 6-8% above a year ago through the third quarter."
Bluntzer says he could see a reduction in the fourth quarter but not necessarily being void of hogs, just measuring against a significantly higher number in 2007 meaning it has more to do with percentages than anything else.
Dr. James Minter, an agricultural economist from Kansas State University, says the report does show a move toward slowing hog production but it is happening pretty slowly. He says there is going to be some pretty large competing meat supplies and not much has been done much to adjust usage on the grain side.
"I think that is going to be a key issue going forward as we move through the 2008 corn marketing year," Minert says. "We're looking at larger exports on corn, we're looking at some pretty large consumption levels on the feed side and if we have any crop production problems this summer we could be setting the industry up for a train wreck in terms of losses."