From Farm Journals Pork, written by Jennifer Shike:
USDA’s Dec. 1 Quarterly Hogs & Pigs Report was a positive one, said University of Missouri Extension economist emeritus Ron Plain, during a teleconference funded by the Pork Checkoff on Thursday. 
“I was surprised a bit by the market hog inventories,” Plain said. “They came in 1.5% lower than trade expectations, and 2% smaller than my attempt to try and predict what USDA was going to say.”
With the profitability U.S. hog producers experienced in 2021, possibly working out to be the most profitable year since 2014, Plain was expecting less reduction in farrowings and a larger pig crop and market hog inventory. 
The total inventory for all hogs and pigs on Dec. 1 was 74.2 million head, reported economist Steve Meyer of Partners for Production Agriculture. That’s down 4% from a year ago, and down 1% from Sept. 1. 
The market hog inventory on Dec. 1 was 68 million, down 4% from 2020, and down 1% from the previous quarter.
The breeding inventory numbers came in at 6.18 million head, up slightly from a year ago and down slightly from Sept. 1. The September through November pig crop, at 33.7 million head, was down 4% from 2020. The number of sows that farrowed during this three-month period was down 5% from 2020 at 3.01 million head, which represents 49% of the breeding herd. The average pigs saved per litter was 11.19 for the September through November period, compared with 11.05 last year. 
U.S. hog producers intend to farrow 2.94 million sows during the December 2021 through February 2022 quarter, up slightly from the actual farrowings during the same period in 2020, but down 8% from the same period in 2019. Intended farrowings for March through May 2022, at 3.01 million sows, are down 1% from the same period in 2020 and down 4% from the same period in 2019.
A Smaller Market Hog Inventory
According to USDA, the Dec. 1 market hog inventory was down 4.4%, which has positive implications for hog prices, Plain explained. The heavyweight group – hogs 180 pounds and up – were down 6% as compared to a year ago, which was 3% smaller than expectations. The 120-pound to 179-pound group was down 6% relative to a year ago, which was 2.4% lower than trade expectations.
“I’m guessing there’s a good chance we may see some upward movement in lean hog futures when they open next,” Plain said. “In general, a tight supply of hogs for the next five months, and likely some pretty good prices for producers as a result of that.”
Plain noted that pigs per litter was up 1.3% this quarter, which is the biggest increase since December through February of 2019. 
“Productivity, which was strong for a number of years, adding almost 1% more pigs to the pig crop just because of more pigs per litter, has for the last several years been inching closer to zero. So, a 1.3% increase is a pretty hefty increase in productivity,” Plain said. “If that continues to carry forward in subsequent farrowing periods, it may add more pigs to the hog supply without having to have more sows.” 
A Deep Dive into the U.S. Breeding Herd
The breeding herd came in at 100% of a year ago. But David Miller, an economist with Decision Innovation Solutions, said if you dig down a little deeper, there’s a lot to unpack in the numbers. 
For the past two years in a row, the December breeding herd in Iowa has been down 97%. North Carolina experienced similar drops, as they were down 7% a year ago and down 4% this year.
But that story is much different in states like Illinois, Indiana, Minnesota and Nebraska. Last year, Illinois was down 3%, but they are up 7% this year, Miller said. Indiana was 100% a year ago and this year, they are up 4%. Minnesota was down 5% a year ago and is up 2% this year. Nebraska was down 2% a year ago, but up 7% this year.
“So, you’ve got a rebound going on. I’m trying to dig into the data a little bit and see if some of the responses had to do with correlations to where plants had some of the most problems in 2020 with regard to hog movement and hog processing. But it’s probably not consistent,” Miller said. 
By the second half of 2022, he said it would not surprise him with the trend on pigs per litter and some expansion being started in breeding herd retention, that second half numbers may be higher than current USDA estimates are. 
U.S. Holds the Growth Card
Analysts expect China will continue to attempt to grow pork numbers and pork volume. But Bob Brown, an independent market analyst, said China is not likely to get back to pre-African swine fever (ASF) levels anytime soon.
“There will be intermittent times when China will be in the market for significant volumes,” Brown said. “But over half of China’s exports come from the European Union (EU). EU production is at best flat. Their feed costs have gone up more than us and I think those feed costs will continue to escalate into the next production year. I don’t think they’ll have additional production to be shipping.”
Brazil is one that could possibly grow more hogs, Brown added. Despite “on-again, off-again” problems with China, they are mostly “on,” he said. 
“It’s interesting that Canada has not shown a motivation to grow numbers significantly. Any growth in world pork production will be in the U.S. in the second half of 2022 and depending on how we get our capacity straightened up on slaughtering into 2023,” Brown said.
Plain agreed that demand will be there, but it’s hard to imagine any country will be in a position to grow their hog supply very much due to high fertilizer and feed costs worldwide. 
“It presents an opportunity for higher pork prices here in the U.S. and slightly larger exports in 2022 than we had this year,” Plain said.
There’s no question ASF is a growing worldwide pork production issue, Miller said. 
“Problems persist and therefore, areas that can solve and manage biosecurity and/or can deal with some of the political issues, have an advantage. I do think the world’s going to try and expand pork production. But I’m not convinced that the world can at the moment, given the current politics and the current responses to disease,” Miller said.
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Positive Hogs and Pigs Report Wraps Up Profitable Year for Producers