37 The Trusted Source for Canada’s Pork Producers Better Pork | December 2023 COMPARING HOG & CATTLE MARKETS These two livestock markets weather different storms. By Moe Agostino & Abhinesh Gopal Moe’s Market Minute It’s clear that the hog market is not the same as the cattle market, but this fact requires pointing out due to the difference in key underlying factors impacting both markets. While the cattle market is supported by strong fundamentals like high demand and short supplies, the current hog market seems to be getting supply-surplus shocks that are weighing on prices. The cattle market has been impacted by a continuous cycle of contraction on account of drought, with production expansion not likely to happen any time soon. The hog market too has been consolidating due to slaughter capacity constraints and regulatory restrictions, but production expansion may have been afoot since the spring of 2022. The United States Department of Agriculture (USDA) September 2023 quarterly ‘Hogs and Pigs’ report was surprising as we found more supply of United States (U.S.) hogs as opposed to the expected contraction despite lower weights and sow liquidation. Though sow liquidation has been active, it seems that producers have doubled down on improving productivity. The pigs saved per litter and litter sizes for recent quarters were better than expected, which is offsetting a tighter breeding herd. Although the sow numbers dropped, there were more than expected market hogs reported, which means that we could see more hogs marketed in the upcoming months. The producers’ achievements in the litter categories are impressive. The occurrence of disease, especially porcine reproductive and respiratory syndrome virus (PRRS), in the U.S. hog herd seems to be the lowest in the last nine years. The summer statistics on the occurrence of PRRS in the U.S. hog herd was record low. But on a cautionary note, normally, it is during October to April that PRRS becomes a real issue. Market estimates prior to the quarterly update were projecting a 0.7 per cent year-over-year (Y/Y) drop in the total U.S. hogs and pigs inventory but the final estimate came in higher at 74.3 million heads. The pigs saved per litter for June to August at 11.61 was a new record high (up 4.2 per cent Y/Y) and this spike in productivity offsets the one per cent drop in the breeding herd to 6.08 million head (lowest breeding herd inventory since 2016). Among the standout features of the report was the fact that there were more hogs than expected in the under 50-pound weight category for DecemSupply-surplus shocks are weighing on pork prices. Jodie Aldred photo
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