USDA’s latest Quarterly Hogs and Pigs Report issued in late September says the nation’s total hog inventory dropped 1% from September 2024 but is up 1% from this past June. Of the 74.5 million hogs and pigs on U.S. farms, 68.5 million were market hogs, while 5.93 million were kept for breeding.
Lee Schulz, chief economist with Ever.Ag, says USDA forecasts 2025 pork production to be down 0.8% versus 2024. During a webinar hosted by the National Pork Board, he said to expect to see reductions in the 2026 pork production forecast, which USDA had up 2.9% before the report. USDA reforecasts each month to reflect new information and changing conditions. Recent fundamentals have had USDA whittling down its pork production forecasts.
“That is likely to occur a little bit quicker now, given where the latest Hogs and Pigs report numbers are at,” he says.
Once again, the report shows that producers are succeeding in getting pigs weaned, as pigs saved per litter saw a 0.9% increase year over year, continuing to set records each quarter, although the increase has been more in the 1% range. “But these are still at record levels,” Schulz says. “Continuing to beat records is more and more difficult.”
He compared the situation to a runner in a race, attempting to beat records. “You can do everything right, but a lot of times, the conditions around you have to be perfect as well. What this data tells us is, on average, conditions continue to be very good out there,” he says. “Now for individual operations, I think we’ve certainly seen some variability in productivity, which is evident in the state-level numbers.”
Schulz sees between a 5% and 10% increase in prices in the fourth quarter compared with a year ago. If realized, 2025 prices will be either some of the highest prices annually or just below the prices of 2022.
Cost of production is always a key factor in a hog producer’s profit equation, and Schulz points out that the current cost of production is about $83 per carcass hundredweight. This is even with next year’s forecast and about 3% lower than the 2024 level. However, cost of production is still over 30% higher in 2025 when compared with 2020 levels.
He says that it all adds up to a profit per head for farrow-to-finish producers of between $20 and $25 for all of 2025 on average, which ranges from about breakeven to profits of about $46 per head. Schulz’s crystal ball calls for about $14 of profit per head in 2026, but producers should expect a range from losses of about $18 per head to profits of about $36 per head.
While crystal balls can be hazy, hindsight is always 20/20, and Schulz says one needs to look back at how bad 2023 and early 2024 were and the recovery that has occurred since the beginning of 2020. Cumulatively, monthly losses were down to $200 per head by March 2024, and the industry just got back to breakeven in August of this year, what Schulz calls the financial healing phase.
Schulz attributes the drop in hog inventory and the reduced breeding herd to that healing phase, and there’s positivity on the horizon. “By this time next year, we could be back to the rather favorable cumulative profit levels we were at in August 2022,” he says, stressing that challenges will exist but so will opportunities.