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 The data also showed that despite higher hog prices in the wake of
the deadly Porcine Epidemic Diarrhea virus (PEDv), producers had not
expanded herds as much as expected, analysts said.
USDA's data suggest hog numbers will remain tight through the rest
of the year, sustaining already high prices for hogs and pork during
the period, said analysts.
They added that Chicago Mercantile Exchange hog futures could climb
as much as their 3-cents per lb daily price limit on Monday, based
on Friday's report.
The USDA report showed the U.S. hog herd as of June 1 at 95 percent
of the year-ago level, at 62.128 million head. Analysts, on average,
expected 63.200 million head, or 97.1 percent of the year-earlier
herd. The U.S. hog herd for the same period last year was 65.188
million head.
The hog herd as of June 1 was the smallest for the period since the
61.701 million head in 2006.
The U.S. breeding herd was 100.0 percent of the year ago level, at
5.855 million head, compared with average trade expectations for
101.8 percent, or 5.990 million. A year ago the breeding herd was
5.884 million head.
"The report overall has a bullish slant because we thought
high-priced hogs and cheap grain made producers profitable enough to
expand herds, which was not the case," said U.S. Commodities Inc
analyst Don Roose.
Still, the ingredients are in place with respect to profitability to
drive herd expansion in 2015, he said.
Ron Plain, a University of Missouri economist, attributed the
unexpectedly restrained breeding herd result to possible reluctance
by farmers to increase production given uncertainty about how to
curb or control the virus spread.
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Analysts estimated that 8 million pigs have died from PEDv since it
was first detected in the country a year ago.
Dan Vaught, an economist with Doane Advisory Services, said
producers may have diverted only a minimum number of young female
pigs to the breeding herd rather then send them to slaughter.
The June 1 supply of market-ready hogs for sale to packers was 95
percent of a year earlier at 56.273 million head. Analysts, on
average, expected a 3.2 percent decline, or 57.310 million. Last
spring's market hog supply was 59.304 million head.
The data showed 9.78 pigs per litter during the period, or 95.0
percent of the 10.31 in the year-ago period. Analysts expected an
average 9.8 head.
"The pigs per litter figure indicates we're continuing to struggle
with PEDv, so that's likely to keep inventories down and gives us a
bullish outlook for the rest of this year," said Plain.
(Reporting by Theopolis Waters; Editing by Dan Grebler and Richard
Chang)
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