You asked for better pig-crop information and now USDA will be providing it three times more frequently, giving you more details to make production decisions.
Starting in January there will be a monthly Hogs and Pigs Report in addition to the quarterly reports that are already being published in March, June, September and December. The monthly reports will include size of the breeding herd, the number of females bred during the previous month, the number of sows farrowed in the previous month and pigs saved from those litters.
The monthly reports are required as a part of Congress' Mandatory Price Reporting Act. The quarterly reports will continue for two years, and then will be evaluated, says Bob Milton, chief of USDA's National Agricultural Statistics Service livestock branch.
Surveys including the new information were taken as a trial run in October and November and will be included as part of the December quarterly report. January will roll out the first individual monthly report. All Hogs and Pigs Reports will come out on the last Friday of every month.
The reasoning behind issuing a Hogs and Pigs Report every month is to provide better tracking of the hog supply.
"Hopefully, we'll be able to forecast cycle turns more accurately with the monthly reports," says Ron Plain, University of Missouri agricultural economist. "One of the things I look for is to be able to avoid the disasters of late 1998 when producers marketed more hogs than the packers could kill."
Plain points out that with a monthly report you will have more time to recognize trends in the breeding herd and farrowing intentions. The key then will be how you use the information to adjust production plans. The hope is that access to such information will promote more stable market hog supplies – and more stable prices, according to Plain.
A common complaint about the current quarterly pig-crop reports concerns their accuracy. The reports have missed cycle turns before, especially during expansion phases. This report will be more frequent but with a smaller sample and an emphasis on the larger producers. Consequently, there are questions about the accuracy of the monthly reports, too.
"No survey is fool-proof. People expecting the reports to perfectly match hog slaughter will be disappointed," says Milton. Over the last two years the quarterly reports have been accurate with only small revisions based on slaughter, says Milton.
"Each of these reports individually is likely to be less accurate than the quarterly reports, but when you look at all the monthly reports together, you're likely to have a more accurate picture of the whole industry," says Plain.
Milton also acknowledges that there are some reporting challenges with monthly reports. Each month a sample of 3,000 operations that will account for about 70 percent of the U.S. breeding herd and pig crop will be surveyed.
One point of interest is how the more frequent reports will affect the futures market. Lean hog and pork belly contracts often see limit-swings in price after the quarterly reports are released, depending on how the actual inventories match up with market projections.
On the one hand, having more reports gives the futures market more opportunities to react, which could cause more volatility.
Plain doesn't think this will be the case. "It's easy to surprise the futures market when there is no news for three months," he says. "Hopefully, the monthly reports will mean fewer surprises and fewer limit moves."
The new monthly reports won't take the price fluctuation out of the live hog market, nor will it make you more profitable. All it will do is give you more timely information to make decisions.
Most economists are expecting hog numbers to pressure maximum packing capacity in the fourth quarter of 2001 and surpass capacity in the fourth quarter of 2002. As of next month, you have one more tool to assess the market and make production decisions. Keeping an eye on these monthly reports could help keep fourth quarter 2002 from mirroring fourth quarter 1998.