Hog Markets Still Seem Unphased by USDA’s Hogs and Pigs Report; Here’s Why


Tyne Morgan, FarmJournal's Pork

October 12, 2020


USDA’s latest Hogs and Pigs Report came as a shock to some economists. The report posted several categories that were higher than pre-report estimates, yet the market seemed unphased by what would typically be a bearish report.


“The big surprise was market hog inventories for the two heaviest weight categories were well above year-ago levels,” says Lee Schulz, Iowa State extension livestock economist. “I think there was maybe some expectation of some of that, but the size of those were much larger, and it doesn't really align with slaughter numbers.”


USDA said as of Sept. 1, the 180-pound-and-over inventory category was up nearly 10%. The highest range of analyst expectations coming into the report was 6.6%. Market hogs weighing 120 to 129 pounds came in 6% larger than a year ago. Schulz says both of those numbers are a story to watch to close out 2020.


“I think that just adds further uncertainty into this fourth quarter.  We know we have a packing constraint in the fourth quarter and we know we have seasonally larger hogs, but just how large is that hog supply going to be?” Schulz asks.


Despite the hefty weights plastered all over the report, lean hog futures shot higher, essentially shrugging off the report.


“Futures prices have really appreciated here since Sept. 1,” adds Schulz. “I think...


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