Lean Hogs Prices Rally Ahead of USDA Quarterly Report

On Thursday, prices of lean hogs soared as the United States Department of Agriculture (USDA) released its latest quarterly report.

Lean hog futures for December delivery jumped 3.58% to $75.38 per pound on September 28. Likewise, October boar meat contracts finished the session 2.22% higher at $83.95 per pound.

On the other hand, cash hogs closed lower as demand wanes with the end of the summer grilling season. National Daily Direct barrows and gilts ended the day 2.43% lower at a weighted average of $74.76 per pound.

Aggregate pork values were down 0.86% to $96.94 per pound. Hams appreciated while ribs, bellies, picnics, butts, and loins depreciated.

The Quarterly Hogs and Pigs (H&P) update also showed a decline in global demand for US lean hogs. In the week ending September 21, pork bookings were at 27,402 metric tons, 9.00% lower than the previous week and 20.00% lower year-over-year (YoY).

Total pork shipments for the week were 30 metric tons, bringing the 2023 annual total to 1.15 million metric tons. Estimated swine slaughter was 481,000, down 0.62% for the week and 1.00% lower YoY.

Bullish sentiment for boar meat might only be for the short term, according to the National Agricultural Statistics Service (NASS). The USDA statistical arm warns of long-term bearish behavior caused by the larger-than-expected swine herd.

USDA Warns of Impending Surplus of Lean Hogs

As of September 01, the USDA counted 74.30 million locally raised hogs and pigs, up 0.30% from a year earlier. Of the 74.30 million, 68.20 million were for disposal in the market, while the remaining 6.08 million were for breeding.

Analysts expected a 0.80% reduction in local swine inventories due to the increasing operation costs of raising livestock. With higher-than-expected supply and declining local and global demand, a surplus of lean hogs might occur next month.

US swineherds intend their sows to birth 2.93 million farrows in the September-November quarter. Heeding NSDA’s warning, they plan to reduce production by 0.68% to 2.91 million farrows in the December-February quarter.