Sort & Cull

Efficiency in Another Key

John Harrington
By  John Harrington , DTN Livestock Analyst

For the last quarter century, pork producers were absolute masters of efficiency, demonstrating year after year that less can easily produce more as long as technology and good management are kept in sharp focus.

Annual pig production per sow climbed from 31.78 in 1991 to 40.44 in 2012 (i.e., an increase of 27%). Jazzed further by heavier carcass weights and greater feed efficiency, annual commercial pork production per sow (i.e., as measured on Dec. 1) over the same time period has surged from 2,399 pounds to 3,986.

Such an amazing record goes far in explaining why the bullish reaction to PED devastation over the last quarter or so has been so intense. Although the trade was generally disappointing that USDA's recent assessment of the winter pig crop was not even smaller, the report did document the smallest measurement of pigs per litter taken since 2008.

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Litter size for the production quarter just completed measured 9.53 pigs, down from 10.8 in Dec-Feb 2013. Crippled significantly by PED, this reading represented the first year-over-year slippage in the average winter pig-pull since 2000.

But though smaller litters added up a total pig crop no bigger than 27.3 million head (i.e., 3% below the prior year and the smallest winter output since 2006), it was presented for shrinking even more thanks to the use of another country tool of efficiency.

Specifically, managers of farrowing barns moved to partially offset pig death loss by employing a record-large percentage of the total sow herd. Sows farrowed last quarter totaled 2.87 million, 3% more than Dec-Feb 2013 and the greatest since 2009 when the total breeding herd was nearly 100,000 head larger.

In other words, resourceful producers farrowed 49.8% of the Dec. 1 breeding herd last quarter, up from 47.9% last year and 48.9% basis the five-year average.

It will be interesting to see if this more aggressive use of the breeding herd continues through the spring and summer. If the PED death toll significantly dries up over the warmer months ahead (as many suspect), pig production could conceivably rocket higher as efficiencies begin firing from both barrels.

For more of John's comments, visit http://feelofthemarket.com/…

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Gale Schaefer
4/10/2014 | 10:43 AM CDT
Seems as if when things are going great someone wants to "Rain on Our Parade". If you are so sure about your PEDv comments let's see you "sell the market". We're you so sure of yourself when the market was going up everyday. Seems as if I read like comments years ago on the grain side. I wonder how well you and your kind handle margin calls. I sure wouldn't be betting against this market right now and especially not before Easter. Seems as if momentum backs-off before Easter every year