U.S. hog herd edges to new quarterly high

The U.S. hog herd in the December to February quarter modestly grew from a year earlier to a record high for that quarter, according to Friday's U.S. Department of Agriculture's quarterly hog report.

Farmers cautiously added to herds while shoring up their bottom lines following the surge in hog numbers as the industry recovers from a deadly Porcine Epidemic Diarrhea virus (PEDv), said industry economists following the report.

'PEDv is much less of a problem than it was in recent years, but it's not totally gone,” said University of Missouri economist livestock Ron Plain.

He said Friday's USDA survey suggests weak hog and pork prices this summer versus a year earlier, with prices for both rising as 2016 progresses.

The USDA report showed the U.S. hog herd as of March 1 at 67.6 million head, topping the then-record high for the quarter of 67.4 million a year earlier.

Analysts, on average, expected 67.626 million head, or 100.3 percent of the year-earlier herd.

The U.S. breeding herd stood at 5.980 million head, a marginal decrease versus last year.

The average trade forecast was 6.016 million or 100.6 percent of the previous year.

The March 1 supply of market-ready hogs for sale to packers was 100.0 percent of a year earlier at 61.7 million head, a slight gain from 61.4 million from March 1 last year. Analysts, on average, looked for a 0.3 percent gain, or 61.595 million.

Analysts viewed the report as generally neutral because outcomes for the top three categories were nearly in line with forecasts.

However, they said the 1 percent bump in the light-weight hog category implies ample supplies through the summer.

Conversely, the June through August farrowings, or the number of female hogs expected to give birth, were below trade forecasts suggesting fewer animals during the second half of 2016.

The uptick in light-weight hogs, and slippage in summer farrowings, may be mildly bearish for nearby Chicago Mercantile Exchange lean hog futures and slightly supportive to deferred contracts on Monday, said Doane Advisory Services economist Dan Vaught.

Pigs per litter, the category most affected by the virus, were at 10.30 during the winter period, eclipsing the December to February 2015 record of 10.23.

PEDv killed an estimated 8 million pigs over the past three years, but has become less severe after the introduction of vaccines and enhanced biosecurity measures.