Steiner and Company produces the Profit Maximizer report on behalf of National Pork Board based on information we believe is accurate and reliable. However neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.
Highlights
- The results of the quarterly survey came in outside the high range of expectations. However, there is plenty of uncertainty about future supply as expectations for growth largely hinge on productivity improvements. Breeding herd on December 1 was still 0.9% lower than a year ago, which will tend to cap growth this winter.
- Weekly slaughter dropped under 2 million head last week, in line with expectations for a holiday-shortened week. In the last four weeks, however, hog slaughter has averaged 2.8% above year-ago levels. Add to this the 1% increase in hog carcass weights and overall supply has been notably higher so far this month.
- Despite the increase in production, the cutout in December was up 3.5% vs. a year ago, evidence of the improvement in demand.
- Both fresh pork and processed pork demand has shown improvement. Loin primal in December was up 4% vs. a year ago and poised to be higher in January. High beef prices have retailers looking to feature less expensive protein.
- Ham prices are expected to be lower to start the new year but the pullback is expected to be limited as slaughter trends lower in Feb/Mar and Easter demand kicks in.
Full Report
USDA issued last week the results of its quarterly survey of hogs and pigs operations and overall the results were neutral for the near term but bearish for the second half of 2026. We think the chart below best illustrates the implications of the latest report. However, as we will discuss below, there is a lot of uncertainty about supply past spring. As recent years have demonstrated, there is a lot of uncertainty, especially about winter production and the impact that weather and disease can have on production.
Winter Supply
USDA made a notable adjustment to projections for hog/pork supplies this winter. In the September survey, USDA pegged the pig crop for Jun-Aug (i.e. Dec-Feb slaughter) at 34.078 million head, 903,000 head(-2.6%) lower than a year ago. This estimate was based on what producers were reporting and likely also reflected the trend in pigs produced in the previous two quarters. Those expectations were decidedly bullish for hog and pork prices this winter. That has now changed. The pig crop for Jun-Aug is now pegged at 34.930 million head, only slightly lower than the previous year. That shortfall of 900,000hogs-it may not happen after all. Producers that were able to hedge their winter hogs based on that projection are the winners. Speculators are left holding the bag. Weekly hog slaughter in January is expected to be consistently under 2.6million head per week and trending lower. February weekly slaughter is expected to run around 2.5 million head per week. Hog weights are expected to be around 0.5% to 1% above last year, implying only a modest supply growth through the winter months.
Spring 2026 Supply
The September survey suggested that spring hog supply would be lower y/y. The September survey does not offer a pig crop estimate since that was still unknown, but producers expected 2.855 million farrowings (births), 70,000 (2.4%) less than the previous year. We did not think pigs per litter would see much y/y increase, so the pig crop was expected to be around 2% lower than the previous year. This implied a commensurate decline in hog slaughter during the spring months. That outlook has been significantly revised following the December survey. Farrowings for the Sept.-Nov. quarter are now estimated at 2.933 million, 0.3% higher than the year before. Pigs per liter were little changed, as we expected, so the pig crop for the Sept.-Nov. (and thus March-May slaughter) is now expected to be 0.4% higher. This is quite a swing in implied pork supply, especially if we continue to see hog carcass weights continue to track above year ago. Pork supply thus in the spring could be1-1.5% above last year (higher pig crop + higher weights.
Summer 2026 Supply
While we have reservations about the spring supply given the wide swing in farrowing, we think the summer supply is even more uncertain. The breeding herd on Dec. 1 was estimated at 5.952 million head, an increase of 16,000 head (+0.3%) from the previous quarter but still 0.9% lower than the previous year. So how is it that despite a smaller breeding herd, there are expected to be some 54,000 more +1.9%) farrowings than a year ago? The chart below shows how volatile the ratio of farrowings to the breeding herd tends to be, not just quarter to quarter(seasonal) but also year to year. Last year, the ratio was 47.2% but the latest estimate puts it at 48.5%. Why such wide differences? Winter weather and disease are significant factors. So the summer supply implications are bearish: farrowings +1.9%, pigs per litter +0.9%, weights +0.5%. The result is a potential 3% increase in pork production during June-Aug. Key word is “potential.”
Fall 2026 Supply
Farrowings for March-May are expected to be 2.1% higher and combined with1.2% trend growth in pigs per litter we estimate the pig crop this spring (and thus fall supply) up around 3.3% vs. a year ago. Will producers add to the breeding herd and combined with improved farrowing ratio bolster the pig crop this spring? Possibly considering lower feed costs and a more stable export market (tariff fears have subsided).
Price Chart
Forecasts
Steiner Consulting Group produces the National Pork Board newsletter based on information we believe is accurate and reliable. However, neither NPB nor Steiner and Company warrants or guarantees the accuracy of or accepts any liability for the data, opinions or recommendations expressed.
