Hog Producers Face Incentive Challenges Amidst Production Declines

Jul 11, 2023

According to USDA Livestock Analyst Shayle Shagam, the numbers from the latest quarterly USDA Hogs and Pigs report paint a discouraging picture for hog producers. Shagam emphasizes that producers are not showing much interest in expanding production, and instead, there may be declines in hog production in the coming months.

The report reveals a significant drop in farrowings during the March through May quarter, and producers have expressed intentions to further reduce farrowings during the summer and fall quarters. Projections indicate a 4% decrease in hog farrowings for June through August compared to the previous year, followed by a 4.5% decline for September through November.

According to Shagam, the anticipated increase in pigs per litter would most likely be insufficient to compensate for the decrease in farrowings. Due to negative returns and low profitability, hog growers have no motivation to increase production. In fact, for the year, expected returns for average size farrow finish operators in Iowa have been negative.

The bearish market conditions are evident in low hog prices, with prices at the national base lean price benchmark around $58-$59 per hundredweight, significantly lower than the $70 observed in the same period last year. While there has been some recovery in recent weeks, hog prices are still around $10 per hundredweight lower than they were last year.

Hog producers currently face challenges and disincentives to expand production, leading to reduced farrowings and a bearish market outlook for the industry.

Video: There’s a Whole Barn Buried Under This Field Now

There's old hog barns under that field now. The old hog barn site on the farm has been sitting there for decades, and this is the week it finally came out: concrete pad, burn pile, charred lumber, all of it loaded into a CAT 725C rock truck and buried in a pit we dug back in the timber.

Tork's been waiting his whole life to drive one of these, so he gets the keys to a 50,000 pound rock truck and I ride shotgun. The excavator loads, the dozer clears the timber, the drone shows the whole site from above, and by sundown there's nothing left of the old place but a smooth patch of dirt. It's a weird feeling erasing something that was here before either of us, but the farm has to keep moving.