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: Five Confirmed New World Screwworm Cases Raise Alarm for Livestock and Pet Owners

Pat Hoffmann, Swine Technical Consultant at Elanco Animal Health tells us about the impact of New World Screwworm. The emergence of New World screwworm in the U.S. creates a threat for veterinarians, livestock producers and pet owners that has not been seen north of the Florida Keys since the fly was eradicated from the United States more than 50 years ago. New World screwworm (Cochliomyia hominivorax) larvae feed on living tissue and can affect a wide range of warm-blooded animals, including livestock, companion animals, wildlife, and even humans.
“New World screwworm could have a devastating impact on animal health, welfare, and producer livelihoods,” said Jeff Simmons, President and CEO, Elanco Animal Health. “We want to thank the FDA, EPA and USDA, for all their work to prepare for this threat. We’re committed to supporting our customers during this challenging time by delivering innovation, scientific expertise, and available resources to help treat New World screwworm and support the health and well-being of animals.”
Elanco is working alongside the U.S. animal health industry to help them fight against this parasite, offering a portfolio of options for pets and livestock that can help treat New World screwworm larvae infestations.