The Market's Fine Print

Play ball!

Pull pigs!

Both shouts of enthusiasm and excitement have cut through the early spring chill in recent days, announcing the opening of baseball season on one hand and the expansionary takeaway of the March 1 Hogs and Pigs report on the other. Indeed, given enough beer and hot dog vendors working the aggregate crowd, I suspect Cub fans and pork producers alike could be easily enticed to exchange cheers with a minimum of confusion.

For those teetotalers and vegetarians in the grandstand who can't see any connection beyond an excessively annotated calendar, let me run through a short checklist that has somehow managed to marry the two events in my own mind.

For starters, each venue has just launched a long and unpredictable season. Much can happen between now and Fall Classic: hot bats, strong export demand, lengthening disabled lists, new trade barriers, hitting streaks and slumps, falling carcass weights and marketing backlogs.

Additionally, both clubs can only pray about the true potential that lines their bench and dugout on opening day. Will the rookie phenom throw the same unhittable heat he owned in the minors? Will foreign buyers keep chasing U.S. pork like they did through the first quarter? Can the aging designated hitter put major wood to the ball for one more year? Are producers disciplined enough to keep a lid on spring and summer farrowing intentions?

Finally, both standings and markets by the time the all-star break rolls along will be essentially determined by the net weight of batting averages (domestic and export demand) and total team errors (commercial production compared with expectations). In other words, prospects for the first half of the pennant race are now pretty much set.

Players may be traded in the second half of the summer, farrowing barns may be further stuffed or thinned. But, for the moment, whether on the team bus or finishing floor, what you see is what you get.

Beyond these generalities, my joint framing of baseball and pork production is also encouraged by a very specific image out of a well-known 1989 movie. I've used the delicious metaphor in this column before, so please excuse the redundancy. But when something seems to describe agricultural dynamics so perfectly, it's impossible to treat it like a one-trick pony.

Of course, I'm referring to the old classic "Field of Dreams," that great fantasy-drama about the Iowa farmer who gets haunted by dead baseball players (moaning "Build it and he/they will come") until he agreed to plow-up a decent stand of corn in order to build a ball field and discover life's true meaning.

You can only assume the spooked farmer would have been significantly less superstition had the corn market been closer to $7 than $3. On the other hand, if the fed cattle market was on its way to $130, a well-drained diamond framed by a tall backstop and long fence along the outfield might be just the ticket to dry-lot several hundred 9-weight steers.

But I digress.

"Field of Dreams" continues to uniquely illustrate the magical combination of anticipation, vision, faith, and success. Indeed, Seaboard Triumph Foods and Clemens Food Group followed the same script in late 2014 and early 2015, announcing plans to aggressively increase the U.S. pork industry's total chain speed through the construction of two major processing plants (i.e., Sioux City, Iowa, and Coldwater, Michigan, respectively).

I'm not sure if any daring executive in either company actually said, "Build the plant, and the hogs will come," but that's exactly how the winning signal from the third-base coach read.

According to the March 1 inventory, the overall swine population was a record 70.987 million head, 3.8 million more than June 1, 2015. To be sure, these visionaries working with steel, concrete, and capital appear to be on the brink of stroking a moon shot to deep center.

Indeed, I think the case can be made that herd expansion at this time might even been understated. In tracking the inventory change from Dec. 1 to March 1, hog accountants add in the Dec-Feb pig crop, subtract out the Dec-Feb commercial slaughter, and adjust to the new estimated inventory as of March 1. This final adjustment is typically called "other disappearance," but for all practical purposes, it represents the quarterly death loss.

Well, guess what? The "other disappearance" for the Dec-Feb period totaled as much as 1.96 million head, nearly 800,000 above the five-year average. Given the relatively open winter and generally tame reporting of disease problems through the period, such an enormous death-loss factor seems hard to swallow.

This weird residual disappearance could be lowered in one of two ways.

Either the size of the winter pig crop should be reduced (which seems similarly counterintuitive) or the March 1 overall inventory should be raised.

So, fans, keep your eye on the ball and weekly slaughter. Both may ultimately power more extra innings than the budding season now imagines.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

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