What a week to be involved in pork production! After 2 years of almost consistent negative news, last Friday’s Hogs and Pigs report, when combined with the grain stocks report and planting intentions report this week put a smile on everyone’s face. Closeouts are beginning to show profits after an extended period of red ink, and the next year looks to be very good based on the futures expectations.
Many of the readers of this blog receive my quarterly commentary written following the release of the hogs and pigs report. Unlike other commentators, I’m not brave enough to predict future prices and profitability. Instead, in my commentary I look at the underlying structure of the US swine industry.
In this years March 1 report, there were 880,000 animals reported to be in the breeding herd in North Carolina. This is the lowest breeding inventory in that state since September 1, 1995. An obvious question for industry observers – does this mean the North Carolina industry is shrinking?
It does appear that their industry will be smaller in the future. Just where this shakes out is yet to be determined. The decline in sow numbers can be linked very closely with the 10% reduction in sow numbers that Smithfield Foods made across its US production system. With a very large number of sows located in North Carolina, this reduction in inventory by one system has had an impact. Several have mentioned the bankruptcy of both Coharie Farms and Coastal Plains as another reason for fewer females in North Carolina. While some the production facilities from these systems may be sitting idle, others continue to produce pigs under new ownership or purchase contract arrangements.
Another number that I track is the kept for market inventory divided by the breeding herd inventory. The US number is 10.1 pigs. For individual states, if the value is above 11 or so, I consider that state as a net importer of weaned pigs, while a number below 9 indicates a net exporter of weaned pigs. It is interesting to note that Illinois, once the second largest state for pork production, is now a net exporter of pigs.
March 1, 2010 inventory in all states with over 1 million pigs in total inventory.
State Breeding Market Total Market/Breeding
Iowa 1,010 17,980 18,900 17.7
N Carolina 880 8,220 9,100 9.3
Minnesota 550 6,650 7,200 12.1
Illinois 480 3,920 4,400 8.2
Indiana 290 3,310 3,600 11.4
Nebraska 365 2,365 3,000 7.2
Missouri 355 2,645 3,000 7.5
Oklahoma 410 1,880 2,290 4.6
Ohio 170 1,880 2,050 11.1
Kansas 180 1,630 1,810 9.1
Pennsylvania 95 1,045 1,140 11.0
S Dakota 145 965 1,110 6.7
Michigan 110 960 1,070 8.7
US 5,760 58,228 63,988 10.1