U.S. hog production could reach record levels again this year.
And a good portion of that growth could occur in Illinois where the swine breeding inventory reached 590,000 head as of Dec. 1, up 30,000 head from a year ago.
Overall, the national breeding herd totaled 6.46 million hogs as of last month, up 135,000 head from the same time last year, according to USDA’s quarterly hogs and pigs report released Dec. 23.
“This report gives a view of what the supply outlook is for (this)year,” Altin Kalo, senior analyst with Steiner Consulting Group, said during a teleconference hosted by the National Pork Board.
“One thing that determines the supply is the size of the breeding herd. And, chances are, we’ll have more hogs down the road,” he noted. “When you look at where the growth came from, the biggest growth was from Illinois.”
The anticipated growth of the swine herd continues a trend in recent years. The inventory of all hogs and pigs as of Dec. 1 totaled 77.3 million head, up 3% from last year and a record for the quarter.
Efficiency also reached an all-time high as the average pigs saved per litter last quarter totaled a record 11.09 compared to 10.76 the previous year.
In Illinois, all hogs and pigs totaled 5.35 million head last month, up 1% from the previous quarter but down 1% from a year ago.
Meanwhile, hog slaughter during a recent 28-week stretch increased 5.5% from the previous year as more animals moved through the system, Bob Brown, president of Bob Brown Consulting, noted.
“The last year says to me U.S. pork producers started expanding around August 2018, which is about the first we heard the news of ASF (African swine fever) in China,” Brown said.
ASF decimated an estimated half of the swine herd in China, the largest consumer of pork in the world. U.S. pork exports increased there, but the lion’s share of new sales to China were gobbled up by the European Union in the past year as American pork was sidelined due to trade restrictions.
The EU shipped 2.5 times the volume of pork to China through October than the U.S., Canada and Brazil combined, according to Brown.
“The U.S. pork industry is missing out on an unprecedented sales opportunity in China when it most needs an affordable, safe and reliable supply of its favored protein,” said David Herring, president of the National Pork Producers Council. “The United States is the lowest-cost producer of pork in the world but, with tariffs, we are not as competitive.”
Analysts look for increased sales of U.S. pork and higher prices this year. Kalo projects average CME lean hog prices of $70 per hundredweight the first quarter before rising to $86 and $83 in the second and third quarters, respectively.
Brown predicts stronger pork exports and even higher average CME lean hog prices of $75 in the first quarter and then up to $92 by the second and third quarters before settling back to $75 in the fourth quarter this year.
Exports currently account for more than one-quarter of U.S. pork sales.