Livestock Monitor – 3/28/2025
MARCH 1 HOG INVENTORIES DOWN SLIGHTLY
The March 1 Hogs and Pigs Report released by USDA-NASS reported all hogs and pigs down less than one percent (-0.2%) to 74.5 million head. Average pre-report expectations had all hogs and pigs in the opposite direction at up +1.2% with estimates ranging from up +0.2% to +1.9%. Market hogs were reported down -0.2% to 68.5 million head. Analysts were expecting an average increase of +1.1% with a range of up +0.2% to +2.0%.
Average pre-report estimates for the market hog weight categories were all expected to be above a year ago; actual reported statistics were down for each category except for hogs weighing 180 pounds and over. Hogs weighing 180 pounds and over came in at 12.5 million head, up +0.5% from last year and in line with the average pre-report estimate of up +0.6%. Hogs weighing 120-179-pounds was down -0.3% from a year ago to 15.7 million head, which was the opposite direction of the average pre-report estimate of up +0.7%. Hogs weighing 50-119-pounds was expected to be up +1.7% from a year ago but were reported down -0.4% to 19.0 million head. Hogs weighing under 50 pounds were reported down -0.3% to 21.3 million, the opposite direction of the average pre-report estimate of up +1.6%. Three of the four report market hog weight categories signal tighter hog supplies going into the summer months.
The December-to-February pigs per litter was reported up +1.1% to 11.65, but this was partly offset by a -1.2% decline in farrowings during the same period to 2.892 million head. This resulted in a December-to-February pig crop that was down marginally (-0.2%) to 33.7 million head. Average pre-report estimates had pigs per litter and pig crop for the December-to-February period up +1.7% for both while farrowings were expected to be even with the prior year. Farrowing intentions for the March-to-May and June-to-August period were expected to be up +1.3% and +0.7%, respectively, but were reported down -0.2% and -0.8% to 2.920 and 2.985 million head. Marginal declines in farrowing intentions signals a measured approach to production through 2025.
DAIRY HERD EXPANDS AGGRESSIVELY IN WEST
At the beginning of the year, the milk cow herd was expected to expand by 10-15 thousand head per month during the first three months and then grow at a slower pace through the spring and summer. The reality has been that 35,000 cows were added to the dairy herd in January, and 15,000 cows were added in February. Changes in the milk cow herd inventory have been consistent with regional variations in feed cost trends. The biggest add came in Idaho, with a 20,000-head boost. The rest of the West added 17,000 head. The Midwest added 12,000 cows, and the Northeast subtracted 1,000. Other regions account for the difference between the 50,000-cow gain for the US and the three regions. Feed costs in the Midwest in January were +2% higher than in October. Feed costs in the West were slightly lower from October to January and in the Northeast, feed costs were up +6% during the same three-month period.
Milk producer profitability as measured by Livestock Marketing Information Center’s Income Over Feed Cost (IOFC) calculations peaked at its highest value ever last September and October across all three regions (Northeast, Midwest, and West) going back to the year 2000. The calculations are not adjusted for inflation for non-feed production inputs such as labor, machinery or other purchased factors of production.
Although dairy cow numbers have surprised to the upside, milk production for the first quarter will come in below projections as milk per cow is on a pace to be down -1% from a year ago this quarter. Leap Year is an issue for February versus a year ago, but California registered a sizable decline in January.
Class 3 milk prices have rallied above $20 this quarter as cheese inventories in cold storage remained below a year ago in January. According to estimates by the USDA-Economic Research Service (ERS), cheese consumption in January was up from a year earlier, reversing trends of the last quarter of 2024 when cheese consumption was below a year earlier.
As March has progressed, Class 3 milk prices have been under pressure. Italian-type cheese production in January was up 10 million pounds (+2% from a year ago), easily accounting for all the increase in total milk production for that month. Additional production gains are leading to more inventory accumulating in cold storage in February with the resultant pressure on prices in March.
MARCH 1 CATTLE ON FEED
The March 1 Cattle on Feed report released by USDA-NASS reported a -2.2% decline in cattle on feed inventories to 11.577 million head. This was within the range of pre-report estimates where analysts were expecting an average decrease of -1.8% with a range of estimates of down -1.0% to -3.0%. February cattle marketings were down -8.9% from last year to 1.633 million head; the decline was due partly to one less slaughter day this year than last year. Pre-report estimates had February cattle marketings down -8.2% on average with a range of estimates down -6.8% to -9.0%.
February cattle placements were 1.554 million head, down -17.8% from last year. Although placements posted a large decline, the actual value did fall within the range of pre-report estimates. On average, analysts were expecting February cattle placements to decline -14.4% with a range of estimates that were down -9.5% to -20.9%. February cattle placements were down in Colorado, Kansas, Nebraska, and Texas by -10%, -21.7%, -12.9%, and -26.8%, respectively, to 135, 360, 440, and 260 thousand head.
The April Cattle on Feed report will provide a quarterly breakdown of steers and heifers on feed. The percentage of heifers on feed will be an item of interest as that will give an indication as to any potential heifer retention to start herd rebuilding efforts in 2025.
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