Report puts pressure on prices

Though lesser feed costs in 2024 have provided opportunities for profitability, hog producers have a long way to go to make up for their 2023 losses, when farrow-to-finish operations lost $31 per head.

According to the U.S. Department of Agriculture’s most recent Quarterly Hogs and Pigs report, the inventory of all U.S. hogs and pigs was 75.8 million hogs, which is an increase of one percent from the fourth quarter in 2023. The report, issued four times per year, presents information on inventory, class, weight group, farrowings and farrowing intentions for the current U.S. pig crop. The fourth quarter report was released Dec. 23, 2024.

The breeding inventory was six million head, which also has an increase of about one percent from 2023 but has a slight decrease from the past quarter. The September to November pig crop was 35.2 million, which is an increase of nearly two percent from 2023. Sows farrowing between September and November were 2.96 million, which is a decrease of one-quarter of a percent from this past year and representing 49 percent of the overall breeding herd. Pigs saved per litter were a record-high 11.92. The increase in pigs saved per litter more than makes up for the two percent decline in farrowings for the fourth quarter. Farrowing intentions for the first quarter of 2025 are 2.95 million, which is an increase of about one percent from 2024. The slightly greater farrowing intentions, if paired with continued high pigs saved per litter could increase inventory numbers, which would put downward pressure on prices to start out the new year.

The market hog inventory was 69.8 million, which is an increase of one percent from this past year but decreased slightly from this past quarter. The lighter weight categories, less than 50 pounds and 50 to 119 pounds, were increased by 1.2 percent and 1.4 percent, respectively, to 21.8 million and 19.4 million. The heavier-weight market hogs, 119 to 179 pounds, were 14.8 million, while the inventory of hogs 180 pounds and greater was 13.6 million. Both heavier categories were decreased by about half a percent, which suggests slightly lesser hog slaughter for the first quarter of 2025.

Much like 2024, demand will be a deciding factor for prices for 2025, with exports playing an important role. Since 2022, Mexico has been the largest importer of U.S. pork with more than $2.35 billion in pork purchases in 2023, accounting for nearly 30 percent of total exports by value. While 2024 has continued to be a promising year for pork exports globally -- increase of six percent by value -- and to Mexico even more so -- increase of 11 percent by value -- domestic per capita demand for pork has changed very little during the past decade. Domestic demand is expected to grow by 0.4 pounds per capita next year, going from 50.5 pounds in 2024 to 50.9 pounds in 2025. The United States became a net exporter of pork in 1995 and productivity gains have allowed U.S. pork a larger share of global exports since then, claiming a peak market share of 35 percent by volume in 2008 and averaging 29 percent during the past decade. Pork will have to continue finding strong global demand to overcome downward market pressure from the elevated hog inventory to provide profitability for hog farmers in 2025.