While most inventory categories in USDA's March Hogs and Pigs Report showed 1 percent growth from year-ago levels, eventual pork supplies will run higher.
The breeding herd, all hogs and pigs, and the market hog categories were all 1 percent higher than for the first quarter of 2005. (See "U.S. Hog Inventories Up 1 Percent") There are, however, 84,000 more gilts/sows reported in the breeding herd.
Add to that the fact that productivity gains continue, as pigs per litter set another record (9.03) and exceeded nine pigs for the fourth consecutive quarter. Then consider the fact that pork carcasses are regularly averaging 200 pounds.
With those 84,000 more breeding animals: "If you figure 20 pigs per sow per year, we will have 1.5 to 1.75 million more hogs on the market next year," says John Lawrence, Iowa State University agricultural economist. "So, the increases will be greater than the 1 percent gain in the breeding herd suggests."
Bob Brown, an independent market analyst in Edmond, Okla., is a bit bolder. "With productivity that we've seen, I'd figure in 25 pigs per sow per year-- that's 2 million more hogs. That's true expansion," he notes.
Three states saw the most growth in breeding herd numbers. They shake out as 20,000 head in Iowa, up 2 percent; 20,000 head in Indiana, up 7 percent; 15,000 head in Missouri, up 5 percent.
There's still some head-scratching concerning the tempered growth despite producers' run of profitability, but the devastating 1998/1999 period is no longer an issue. "I think 1998 is finally in the history books," says Chris Hurt, Purdue University agricultural economist.
According to his calculations, an operation marketing 10,000 hogs annually had a $300,000 loss in 1999. By 2004, the unit would finally breakeven; but by the start of 2006, it would be $700,000 in the black. "With the retained earnings of 2004, 2005 and now into 2006, producers are not making decisions on 1998," he says.
Lawrence adds that "more producers recognize that 2004/2005 was demand driven-- not supply driven, we did have record pork supplies-- that it was an aberration. It helped them plug some holes (losses), but they also know they've started to give some of that margin back."