Fewer sows suggests producers are exiting hog business
Some hog farmers are leaving the business in the face of low market prices and coronavirus slowdowns at packing plants, said two pork industry analysts on Thursday. As evidence, they pointed to a USDA report showing that there are fewer sows on U.S. farms this fall than a year ago.
“There is some reduction in the industry taking place at this time,” said Len Steiner of Steiner Consulting. Economist Ron Plain of the University of Missouri agreed with Steiner during a National Pork Board webinar. “This has been a tough year for a lot of producers financially … so, yes, I think we are losing our producers during this stressful time,” he said.
The quarterly Hogs and Pigs report estimated the sow inventory at 6.33 million head as of Sept. 1, down 2% from the previous Sept. 1 and barely higher than the June 1 figure. The pig crop born from June to August was 3% smaller than during the same period in 2019, another sign that hog numbers would contract in the future.
Overall, there were 79.1 million head of hogs on U.S. farms on Sept. 1, the highest total ever for that date but down 1% from the 79.6 million hogs on farms on June 1. Most of the hogs, 72.8 million, were being fattened for slaughter. The market hog total was down by 1% from June 1 but 1% larger than last Sept 1.
The number of heavy hogs, weighing more than 180 pounds, was 10% higher than a year ago. Analysts said it suggested a lingering backlog of 1.5 million hogs because of slower production at pork plants last spring.
“I too have a hard time understanding how the throughput can be slowed down this much,” said Kevin Bost of Procurement Strategies Inc. “Hog slaughter is constrained by kill capacity, not the supply.”