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Latest USDA hog inventory report shows some opportunity for expansion

The USDA’s latest quarterly report on hogs and pigs gives producers indicates some expansion in the future.  The overall hog inventory was lower than one year ago, but up by 2 percent from March 1.  The breeding inventory is up from last year and last quarter, but the market inventory is down from last year. 

The latest corn acreage report has economists thinking that the overall inventory will rise in the future.  According to Daniel Bluntzer, Director of Research, Frontier Risk Management in Corpus Christi, Texas, lower corn prices could lead to more pigs in production.

“I think once we get to next year, we’ll be looking at 1.5, maybe as much as 2 percent more pigs next year,” said Bluntzer.  “We could be very overpriced in corn right now.  As the summer goes on, if that comes up to the realization, production will latch on to that and continue to increase the herd.”

Analysts believe that the industry has the capacity to expand and will not see any danger as far as facility constraints. As for the threat of Porcine Epidemic Diarrhea Virus, Steve Meyer, president of Paragon Economics, says the disease is not expected to impact inventories very much in the near future and had no real impact on the current inventory report.

“At this point, I don’t think there’s much out there, and it probably wouldn’t have been picked up in this June 1 inventory anyway,” said Meyer. 

Analysts say that robust demand and anticipated lower feed costs may lead to rising pork inventories and slightly better profits for producers.

 

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