U.S. hog crop shrinks, prices rise

Pork is one, if not the most popular meat choices across the globe, particularly in China and throughout South America, which has helped buoy the demand for U.S. pork producers in recent years.

But a recent from the U.S. Department of Agriculture indicates that domestic pork supplies continue to shrink amid the porcine epidemic diarrhea virus (PEDv). The government said inventory of all hogs and pigs on Dec. 1 was 65.9 million head, down 1% from a year ago, and 2% less than the Sept.1 count.

The virus which is deadly to piglets was first detected in U.S. herd in mid-May.

While feed costs are receding, farmers are still holding back herd expansion at this time. USDA reports market hog inventory slipped 1% to 60.2 million head. The inventory also declined 2% from the previous quarter.

In the September-November period the pig crop was down slightly at 29.3 million head. Sows farrowing during the period also declined slightly to 2.88 million head. The sows farrowed during the quarter represented 50% of the breeding herd.

Through the first quarter of 2014, USDA expects actual farrowings to dip 3% from the levels in 2012, while the demand for pork continues to escalate in China.

Roughly 23% of U.S. pork is exported, a number that is expected to rise in the next few years. Robust global demand and shrinking supplies are a perfect recipe for higher pork prices well into 2015.

Wholesale pork cutout prices for the week ending Dec. 27 were up 4% from a year ago. Tenderloin prices were up 14%, while ham prices were 13% higher than in December 2012, according to the USDA.