Economist says there’s more pressure on the swine breeding herd
A market analyst says the swine breeding herd has been under pressure for the last several years and that likely won’t change anytime soon.
Altin Kalo with Steiner Consulting Group says between December 1, 2019, and March 1, 2022 it declined 7% and is now at its lowest level in five years. “The breeding herd at 6.168 million head is 1.1% lower than it was a year ago,” he says. “But it’s about 70,000 head higher than it was in March.”
Kalo says margins started to tighten for producers in late 2019 and then the coronavirus pandemic hit and the industry continued to operate under pressure.
But, he says that doesn’t mean the industry has found a bottom and will now trend higher. “Previous years, 2012 and 2013, where going into the summer we had an uptick in the breeding herd and then those high feed cost came into play,” he says. “And margins started to erode, and the breeding herd started to pull back again.”
While the numbers appear to be supportive to prices, Kalo says rising feed costs and demand concerns create uncertainty and volatility in the markets.