Summary

Record global pork production is largely a function of efficiency gains in China, and higher slaughter weights in the EU, which are expected to more than offset the foot-and-mouth disease (FMD) related drop in South Korea. Expanded world trade is driven by strong demand from South Korea, China and the Ukraine.

World Pork Production Slightly Higher

Chinese production is raised slightly from October’s forecast, as high pork prices and stronger demand encourage expansion by modern, more efficient producers.

The EU is revised upward in line with higher than expected slaughter and weights. Restructuring in the hog industry is expected to accelerate, as the most inefficient farms and some backyard production leave the industry.

Historical revisions were made to the Russian swine and pork data. High feed prices and limited feed availability in late 2010 constrained previously forecast expansion.

South Korea is reduced by one-third – the lowest level in nearly 20 years – as a result of the worst FMD outbreak in the country’s history. The culling of 30 per cent of the swine herd, combined with the two- to three-month waiting period before restocking FMD-affected farms, will temporarily reduce the pig crop.

The US forecast is raised slightly due to higher expected slaughter and heavier weights.

World Imports Raised Mostly on South Korea

Shortages in South Korean domestic pork supplies are expected to be partially offset by a nearly 50 per cent jump in expected imports. To facilitate those imports and help curb rising prices, the Korean government created a special zero duty tariff-rate-quota (TRQ) for frozen pork bellies and other cuts. Even with larger imports however, pork consumption is expected to fall, as high prices cause consumers to shift to other meat proteins such as fish, poultry, and imported red meats.

China is raised as robust demand outpaces modest production gains.

Ukraine is revised upward in response to stronger demand.

World Exports up as the EU and the United States Capture Rising Asian Demand

EU is forecast significantly higher with strong demand from Asia and Russia. The EU will likely fill much of the Korean zero duty TRQ for frozen pork bellies, while expanded pork shipments to Russia are expected in place of live hogs for slaughter.

The forecast for the United States is unchanged although stronger shipments are expected in the first half of the year due to strong demand from South Korea and China. Along with the EU, US pork is expected to account for a portion of the Korean zero-duty TRQ for pork cuts given its readily available supplies and strong price competitiveness.

Further Reading

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