Iowa pig farmers bracing for economic challenges

Iowa pig farmers bracing for economic challenges

The record swine inventory numbers contained in Friday’s quarterly Hogs and Pigs Report from USDA’s National Agricultural Statistics Service spells difficult times ahead for Iowa and U.S. pig farmers.

Iowa farms had a record 22 million pigs as of Sept. 1, according to the report. The Sept. 1 inventory was 7 percent higher than the previous quarter and 2 percent more than the Sept. 1, 2015, inventory.

The total U.S. inventory on Sept. was 70.9 million head. This was up 4 percent from June 1 and 2 percent more than Sept. 1, 2015.

“Larger than expected recent hog slaughter prompted USDA to revise early 2016 hog numbers upward,” said Lee Schulz, Iowa State University Extension livestock economist. “More Canadian feeder pigs continuing to cross the border also have added to inventories and production.”

The June-August quarterly Iowa pig crop was 5.50 million head, up 4 percent from the previous quarter but virtually unchanged from last year. A total of 500,000 sows farrowed during this quarter. The average pigs saved per litter was 11.0 for the June-Aug. quarter, tied with the Sept.-Nov. 2015 quarter for the highest pigs per litter on record.

Across the U.S., the June-Aug. 2016 pig crop was at 32.0 million head, a 2 percent increase from 2015. Sows farrowing during this period totaled 3.02 million head, up slightly from 2015. The sows farrowed during this quarter represented 51 percent of the breeding herd. The average pigs saved per litter was a record high 10.58 for the June-August period, compared to 10.39 last year.

“The combination of more breeding animals and more pigs per litter has bolstered quarterly pig crops and fueled the demand for more processing capacity. Each of the last four quarters have been records for pigs per litter and pig crops,” Schulz said.

As of Sept. 1, Iowa pig producers planned to farrow 490,000 sows and gilts in the Sept.-Nov. quarter and 490,000 head during the Dec. 2016-Feb. 2017 quarter.

U.S. hog farmers intend to farrow 2.93 million sows from Sept.-Nov. 2016, down slightly from the actual farrowings during the same period in 2015, and down 2 percent from 2014. Intended farrowings for Dec.-Feb. 2017, at 2.93 million sows, are down slightly from 2016, but up 1 percent from 2015.

“Lower hog and pig prices have likely raised the red flag on expansion at least for now. However, longer-term additional expansion is possible,” Schulz added. “Low feed grain price projections for the coming year(s) and the expectation of increased packer competition for slaughter pigs as new packing plants begin coming online set the stage for possible growth.”