Pork Exports Holding Their Own13 November 2012
US - September export data are in and, though 1.3% lower than last year, we are going to declare them a victory for U.S. producers and packers, writes Steve Meyer for The National Hog Farmer.
It is not often that a year-on-year decline is good news. But we are now into the months in which exports to China-Hong Kong surged last year, so staying close is indeed a good thing in and of itself. Figure 1 shows monthly pork exports to major U.S. markets. Some highlights include:
Japan remains our top destination for pork products, taking 107.7 million pounds, carcass weight, in September. That figure is 10.9% smaller than one year ago and brings the year-to-date shipments to Japan to 1.04 billion pounds, carcass weight, 5.6% smaller than in 2011.
Shipments to Mexico, at 98.952 million pounds, were almost constant from their August levels and were 23.1% higher than last year. Year-to-date shipments to Mexico are 13.7% higher than one year ago.
China/Hong Kong remains our third-largest market but just barely so, edging out Canada by just 119,000 pounds in September. Monthly shipments to China/Hong Kong were 42% smaller than one year ago and will most likely be less than half of last year’s levels over the next two months. Year-to-date shipments are still 39% of last year’s level thanks to much higher exports in January through April.
As noted, Canada remains in a very close fourth place even though our pork exports northward were record large in September at 55.176 million pounds, carcass weight, 9.6% higher than last year. Year-to-date (YTD) shipments to Canada are now 17% larger than last year.
Exports to South Korea rebounded nicely in September, nearly doubling their August level. YTD shipments are still over 20% lower than last year’s foot-and-mouth-disease-enhanced levels, but usually grow seasonally through year’s end.
Pork variety meat exports increased by 1% vs. a year ago, while the value of those shipments increased by 21%. Those figures bring year-to-date variety meat shipments to 320,286 tons. That figure is 14% smaller than one year ago, but the value of those tons adds up to $494.353 million, 13.8% more than last year through September.
USDA’s Foreign Agricultural Service reports that September’s pork exports were valued at $431.758 million, nearly 9% less than one year ago. I’m not surprised by that figure given the lower hog and pork prices we saw as slaughter surged in August and September. Year-to-date, however, the value of U.S pork exports is 6.1% larger than last year at $4.034 billion.
The total value of pork, pork variety meat and sausage casing sales this year through September stands at $4.633 billion, 6.4% higher than last year. That figure represents $56.01/hog slaughtered from January through September.
Corn and Soybean Crop Estimates Up Slightly
And the news Friday was not bad on the cost side either. USDA estimated that the 2013 corn and soybean crops were slightly larger than previously expected (Figure 2). The changes were not large but, especially in the case of soybeans, were large enough to make a difference in futures prices. Soybean meal was down $31 to $47/ton on Friday and was another $12-$17 lower as this newsletter went to press. The 2012-crop corn survived Friday’s session somewhat unscathed, losing only 2-3 cents/bu., but was under significant pressure this morning with futures down 19 to 23 cents/bu.
Even with lower Lean Hogs futures on Monday, the 2013 profit outlook for pork producers continues to improve. As Figure 3 shows, the estimate for next year based on mid-morning Monday hog, corn and soybean futures is for an average loss of only $1.82/head. Yes, it is still a loss, but that is the closest we have been to profits for next year since I started computing year-long estimates back in June. The average includes six profitable months (May through September) with the summer months being $11 to $16/head in the black. Fall 2013 losses, at present, are still around $8.50/head, but those figures will improve markedly if next year’s crop develops well.