USDA June 1 Hogs and Pigs Report

Treading Water

USDA June 1 Hogs and Pigs Report (1,000 head)
 202320242024 as percentage of 2023
Kept for Breeding6,2066,00897%
Kept for Marketing67,34568,479102%
Farrowing Intentions Jun-Aug3,0402,96397%
Mar-May Pig Crop33,31434,021102%
Mar-May Pigs per Litter11.3611.56102%

The USDA June 1 Hogs and Pigs Report was no market mover. When you look at all categories there is nothing to get bullish about. A fewer less sows, a few less market hogs. The reality if we were all within 2% on most things that we do we would be happy. USDA using only information voluntarily given has a tough time to get 100% correct.

Some Observations

  • Iowa down 90,000 sows in the last year (910,000 to 820,000).
  • Texas down 50,000 sows in the last year (180 to 130).
  • Missouri down 40,000 sows (455,000 to 415,000).
  • North Carolina down 30,000 sows (800,000 to 770,000).
  • Colorado up 20,000 sows in the last year (145,000 to 165,000).
  • South Dakota up 20,000 sows in the last year (315,000 to 335,000).

It is interesting that in similar market conditions some states lose sows while some gain. The total inventory is a sum of individual decisions and circumstances.

  • The June inventory numbers would indicate there has been no liquidation of significance in the last six months with sow herd gaining 9,000 sows since December 1 (December 5,999,000 – June 6,008,000). We find that interesting with sow slaughter 90,000 higher than a year ago Jan – May. Our industry has amazing resiliency with the Iowa State University farrow to finish financial returns indicating a loss of $12 per head the last six months. We are like the energizer bunny, just can’t stop, keep going, going, going. It’s been 18 months of mostly losses and the profits the next twelve months? Look marginal looking at futures. To be optimistic you need to be the boy who sees the giant manure pile and thinks there must be a pony inside.
  • We expect the market will move when we least expect it. With Beef cut-outs $3.26 lb. and Pork cut-outs 98¢ lb. there is a chance that consumers will find Pork so cheap that despite our continued industry program to produce pork that tastes like paper we will increase consumption due to our race to the bottom cheaper meat. The other option sell more pork as dog food as it appears pork is cheaper today than many dog food options. Maybe our new marketing slogan Pork, the other dog food. Most know the problem; we need to produce better tasting pork. The worship at the altar of lean, lean, lean ignoring taste has severely handicapped consumer demand and our profit potential.

Corn

USDA released a report Friday that indicated plentiful corn now and into next year. Natural Corn Price average now is $3.90 a bushel. At one point two years ago, corn hit $8.00 a bushel. Much of the last two years corn was $6.00 a bushel. Lower corn price is helping swine cost of production. Every $1.00 a bushel change moves cost of production about $10 per head. The effect of lower corn price – i.e., U.S. produces 15 billion bushels of corn – every $1.00 a bushel change is $15 billion to U.S. corn farmers – John Deere will be selling less iron in 2024-25.

Change

Our industry is evolving. In the Global Swine Genetic Industry there has been major consolidation. Genesus is now Canada’s only swine genetic company. The scale of investment in genetics and the technology to have continued improvement has increased dramatically over the last few years. Swine Genetic Companies that did not have continued improvement have gone by the wayside. Increased capital for continued genetic gain are necessary to remain competitive globally. Genesus global competitors are publicly traded companies, part of a larger entity and or co-ops with major funding from their respective governments. Genesus is the only privately owned global swine genetic company solely focused on swine genetics. We wanted to keep it that way.

The saying “There is nothing permanent except change” comes to mind. Genesus quest to remain independent and to facilitate continued enhanced genetic improvement and market presence has led us to Canada ZF Investments who are proceeding with purchase of Genesus and its subsidiaries as part of planned restructuring.

There will be a new merged entity Genesus Genetic Technologies operating globally. Genesus existing shareholders senior, management, colleagues join Genesus Genetic Technologies. I will be President – CEO and look forward to continue working globally with colleagues, genetic partners and customers as Genesus continues to bring Genetics that live and deliver a superior taste. “Our future starts today not tomorrow.” Pope John Paul II

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This post was written by Genesus