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Pork Outlook Report - April 2003

by 5m Editor
24 April 2003, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the April 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Pork Industry data. The report indicates that retail pork prices are expected to be higher in the second half of 2003, reflecting lower pork and competing meat production.

Overview

Total meat production in 2003 is expected to drop 1-2 percent from last year, with all species registering declines.

The March Quarterly Hogs and Pigs report indicated that producers continued to reduce their breeding herds and year-over-year farrowing intentions. These reductions point to a smaller pig crop and lower hog slaughter in 2003. If dressed weights continue to increase, the decline in pork production in 2003 may be held to less than 1 percent. Hog prices are likely to average $38-$40 per hundredweight (cwt) in 2003, compared with $35 last year, reflecting lower production of pork and competing meats.

Lower Inventories, Intentions for Swine

Continued breeding herd reduction and lower year over- year producer farrowing intentions (reported in the Quarterly Hogs and Pigs report released on March 28) point to a smaller pig crop and lower hog slaughter in 2003. If dressed weights continue to average a pound above last year, however, pork production declines are likely to be held to less than 1 percent below a year ago. Hog prices are likely to average $38-$40 per hundredweight (cwt) in 2003, compared with $35 last year, due to lower animal supplies. Retail pork prices are expected to be higher in the second half of 2003, reflecting lower pork and competing meat production.

Commercial hog slaughter in the first quarter of 2003 totaled just over 24.6 million head. Higher slaughter plus heavier dressed weights combined to push commercial pork production more than 2.5 percent ahead of the same period last year. Live equivalent prices of 51-52 percent lean hogs averaged $35 in the first quarter, 10 percent below the first quarter of 2002. Hog prices rose in March from earlier this year, reflecting seasonal patterns, but wholesale cut prices remain relatively weak as pork supplies remain large.

U.S. packers are expected to slaughter 2 percent fewer hogs in the April-June quarter, as the breeding herd reductions that occurred last summer begin to translate into lower availability of slaughter hogs. With the average dressed weight unchanged from a year ago, pork production in the second quarter of 2003 should drop by about 2 percent. Hog prices are expected to average $39- $41 in the April-June quarter. Retail pork prices are expected to average more than 5 cents above the first quarter, reflecting lower pork supplies.

The Quarterly Hogs and Pigs report indicated that the March 1 inventory of U.S. breeding swine fell 4 percent below herd levels of 2002. The December- February pig crop was 2 percent lower than in the same period last year. The lower pig crop implies a 3-percent lower slaughter in the July-September quarter, but declines in production should be held to less than 3 percent below a year ago, if weather and feed costs continue to support weights above last year’s levels.

Producers indicated intentions to farrow fewer sows in March-August 2003. If producer intentions are realized, 3 percent fewer breeding animals will farrow during the March-May quarter than in the same period last year, suggesting a lower slaughter in the fourth quarter of this year. Hog slaughter in the October-December quarter is expected to fall about 2 percent below the fourth quarter slaughter of last year. Fourth quarter weights are expected to average a pound above last year, implying pork production 1 percent below last year. Hog prices are expected to be $36-$40 per cwt in the fourth quarter. Producers’ intentions to farrow 3 percent fewer sows in June-August 2003, than in the same quarter of 2002, indicates less pork production in the first quarter of 2004.

Further information

Links

For more information view the full Livestock, Dairy and Poultry Outlook - April 2003 (pdf)

Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - April, 2003