* Trade spats cloud U.S. pork export outlook

* Report called neutral-bearish for futures

By Theopolis Waters

CHICAGO, June 28 (Reuters) – The hog population on U.S.
farms in the March-May quarter was up 3.4 percent year-on-year,
a record high for the quarter, according to the U.S. Department
of Agriculture quarterly hog/pig report on Thursday.

Farmers grew their herds, bolstered by record numbers of
baby pigs, to feed four new packing plants that came online
since late 2017, said analysts.

More hogs in the pipeline present a demand challenge after
China in early April tacked extra tariffs on U.S. pork after
Washington imposed higher duties on Chinese steel and aluminum.

Mexico will allow in U.S. pork under a quota system despite
initial retaliatory measures in response to higher Mexican steel
and aluminum imports tariffs set by U.S. President Donald Trump.

“This could be risky fourth quarter in terms of producer
profitability given the large supplies coming into the
marketplace and the uncertain demand dimension,” said Livestock
Marketing Information Center director Jim Robb. “It could be
more red ink than normal,” he added.

Don Roose, president of U.S. Commodities, said Thursday’s
report confirms that aggressive herd expansion was underway.
Record pigs per litter speaks to farmer efficiency in raising
piglets, he said.

A previous USDA supply/demand report had forecast increased
U.S. pork exports and domestic demand, which is expected to
absorb the buildup in supplies, said Roose.

“Those are very much uncertain, particularly when you’re
talking about the potential trade concerns,” said Roose.

Chicago Mercantile Exchange lean hog futures on
Friday may have a neutral to bearish reaction to the report,
said analysts.

Thursday’s USDA report showed the U.S. hog herd as of June 1
at 103.4 percent of the year-ago level or 73.451 million head,
the most ever for that period since the government began
tabulating the data in 1964.

Analysts’ average forecast was 73.140 million head.

The U.S. breeding herd was 103.5 percent of the year-ago
level, at 6.320 million head, up from 6.109 million last year.

The average trade forecast was 6.210 million.

The June 1 supply of market-ready hogs for sale to packers
was 103.4 percent of a year earlier, at 67.131 million head, up
from 64.901 million last year. Analysts, on average, had
estimated 66.921 million.
(Editing by Marguerita Choy)