Are we expanding production?

With record numbers of pigs being killed and the upcoming hogs and pigs report, I’ve been asked several times in recent weeks for my thoughts on inventory numbers and producer attitudes.

Builders have told me interest in new wean-finish, nurseries and grow-finish barns has cooled in the upper Midwest. While they will be busy this winter finishing facilities started this fall they note a clear slow-down in interest for construction next year.

At the same time, I have not heard of any slow-down in discussions and plans for new breed-wean sites. Because these take so long to develop, finance and permit producers have not backed away from their replacement and/or expansion planning on these projects. The time line from when a project is first discussed with lenders, builders and genetic supplies to first sale of market animals is often 3-4 years and the confidence in the long term profitability of the swine industry in the US underlies the decision, not short term market signals.

I have heard of spot shortages of weaned pigs. Keep in mind that this occurs every year at this time. This seasonal shortage is why we have the spring and summer rise in market prices. So far the USDA reported spot market price of weaned pigs is following the historic trend line for seasonality, suggesting we aren’t excessively short of weaned pigs.

I’m also getting reports of empty facilities from several sources. Again, how much of this is seasonal and how much is due to new facilities being offered to pig owners as replacement for older and maybe less desirable facilities?

What about PEDv? I’m aware of sites with PEDv problems right now but the number of sites doesn’t begin to approach the winter of 2013-14. USDA mandatory reporting data suggests that the increase in sites and cases so far is tracking with the 2014-15 winter, not the 2013-14 winter. While problematic for breed-wean sites with the disease, it looks like we’ll have ‘normal’ availability of weaned pigs for facilities going into next summer’s market.

Leave a Reply

Your email address will not be published.