The December 1 swine inventories published by USDA on December 23, 2015, in the Quarterly Hogs and Pigs showed the same increases in each animal category: All hogs and pigs (+1 percent), breeding herd (+1 percent) and market hogs (+1 percent). The breeding herd, at 6.002 million head, was the largest since December 2008. Based on average breeding herd, an industry expansion began during 2011. Comparing the December 1, 2015, breeding inventory with the breeding inventory on December 1, 2010, the number of animals kept for breeding has increased by almost 225,000 head.
The larger breeding inventory on December 1, 2015, is not likely to buck the strong downward secular trend in breeding animal numbers established in the mid-1990s. The figure below shows how breeding animal inventories have declined at the same time that pig crops have increased. This is due primarily to significant increases in breeding animal productivity, i.e., increases in litter rates.
The December report shows that litter rates continue to rebound from below-trend increases registered in 2013 and 2014 due to porcine epidemic diarrhea. The September-November litter rate was 10.53 pigs per litter, an increase of 2.9 percent from a year earlier. It is notable that the September-November litter rate is record-high for the U.S. pork industry, breaking the “highest ever” mark established in just the previous quarter (June-August 2015) (see next figure below).
Litter rates will likely continue to be a key factor driving U.S. pork production in 2016. Commercial pork production is forecast at almost 25 billion pounds, a 2- percent increase from last year, despite slightly lower first-half 2016 farrowing intentions stated in the December report. Lower farrowings—1 percent below first-half 2015—are expected to be more than offset by continuing-strong litter rates and slightly higher hog weights. For 2016, the average price of live equivalent 51-52 percent lean hogs is expected to be $46-$49 per cwt, more than 5 percent below prices in 2015.