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U.S Hogs and Pigs Report

More Pigs!

The USDA released the June 1st Hogs and Report last Friday. Lots more pigs! 2.2 million more markets. This will lead to almost 100,000 more hogs per week for plants year over year in coming 5 months.

U.S Hogs and Pigs Report

June 1 (1,000 head)

 

2016

2017

2017 as percentage of 2016

Kept for breeding

5,979

6,069

101

Market

62,144

64,853

104

Under 50 pounds

19,897

20,617

104

50-119 pounds

17,198

17,902

104

120-179 pounds

13,819

14,435

104

180 pounds and over

11,229

11,899

106

Pig Crop March – May

31,097

32,264

104

Sows Farrowing March – May

2,968

3,060

103

Pigs per litter March – May

10.48

10.55

101

 

Simple Arithmetic March to end of May – 3% more farrowing’s – 1% bigger litter = Pig Crop 4% greater year over year.

There is no doubt there will be more hogs in the coming weeks. Packers will continue with excellent margins, as packing capacity will be challenged until the new plants come on stream. The multi million-dollar question is start dates for Seaboard-Triumph in Sioux City and Hadfield in Coldwater, Michigan.

Since last fall two new plants have come on stream. Moon Ridge in Missouri (3,000 capacity head per day) and Prime Pork in Windom, Minnesota (capacity 6,000 head per day). Put these together and new capacity is currently about 50,000 more per week. The other two plants in Sioux City (10,000 a shift) Coldwater (10,000 a shift). When all up and running 160,000 a week single shift capacity. 2 shifts pushing 300,000 a week capacity.

One thing interesting is the June 1 breeding herd was 6.068 million. The breeding herd on December 1 – 6 months ago was 6.090 million. If correct the U.S breeding herd is 20,000 smaller then 6 months ago. Not exactly a number indicating sow herd expansion.

Demand

Pork Demand is strong with Pork cut-outs last Friday $1.03 lb. We are being helped by strong Choice Beef cut-outs at $2.25 lb.. Beef is more then double the price of pork. This is certainly helping pork demand and prices. Lean Hog Prices averaged 87.30¢ lb. last Friday. Farrow to Finish hog producers at this price should be making $50-70 head range. Its good.

 

Friday 6/30 Cut-Outs Primal Values

Carcass

102.92

Loin

94.64

Butt

109.42

Picnic

67.90

Rib

141.24

Ham

74.85

Belly

198.17

 

We find cut-out values tell a real story. By Price a lb. Belly (Bacon) 198.17 Rib 141.24. Butt 109.42. All parts of any carcass that have significant fat which leads to flavor. Loins and Hams used to drive carcass value but now only Loin 94.64 and Ham 74.85. Loins are half the price of belly. What does this tell us. Consumers like the taste – flavor of Pork that has more fat-marbling. Prices of each cut-out value is driven by demand. In the past Loin and Ham have been the highest prices of the pork cut-out. As our industry became obsessed with lean and took out the marbling the pork cut-out flipped with Belly-Ribs becoming the highest value per parts. Consumers vote with their money. When are we going to get what consumers want? Its staring us in the face.

 

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This post was written by Genesus