Pork Outlook Report - May 2003

By U.S.D.A., Economic Research Service - This article is an extract from the May 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Pork Industry data. The report indicates that hog prices are expected to continue to register gains again in 2004, reflecting lower pork and competing meat production.
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Red meat and poultry production in 2004 is expected to total about 84.4 billion pounds, down fractionally from this year and 1.5 percent below 2002. The continuing decline in red meat production due to reduced animal inventories will only be partially offset by increasing poultry production.

With red meat production below year-earlier levels and increasing exports, hog and cattle prices are expected to continue to register gains again in 2004.

Meat and poultry exports are expected to increase 3-4 percent in 2004, compared with a likely 3-percent gain this year. All major meats are expected to post gains in both 2003 and 2004. However, beef exports this year will likely be up less than 1 percent. Imports of cattle and hogs are expected to decline in 2004 as grain production recovers from the drought-reduced crop last year. Due to the expected larger grain crop, more animals will be retained in Canada for feeding.

Total 2003 Hog Slaughter Estimate Increases Slightly on Higher April Slaughter

U.S. packers are expected to slaughter about 23.8 million hogs in the second quarter, slightly more than previously estimated. April slaughter, although larger than expected, will fall below yearago levels for the first time this year.

Slaughter for 2003 should come in at 99 million head, or, about 1.3 percent fewer hogs than in 2002. With higher dressed weights this year however, total pork production should be less than 1 percent below 2002. Second-quarter prices are expected to range between $39 and $41 per cwt (live equivalent, 51-52 percent lean). For 2003, hog prices should average about 11 percent higher than last year, or $38.60 per cwt.

Lower Production and Higher Prices in 2004

The breeding herd reductions sustained by the U.S. pork industry since the June-August quarter of 2002 will gain traction in 2004.

Pork production in 2004 is expected to be 1-2 percent lower than 2003, with per-cwt hog prices (live equivalent 51-52 percent lean) to average 11 percent higher than this year, at $41-$44 per cwt. The estimates depend on the assumption of normal weather conditions, particularly in the U.S. Corn Belt.

U.S. Pork Imports Up Sharply in the First Quarter of 2003

In the first quarters of 2003, the United States imported 289 million lb (carcass weight equivalent) of pork, versus 235 million lb a year ago—an increase of almost 23 percent. Pork imported into the United States comes mainly from Canada (more than 80 percent), and from Denmark (about 12 percent). While first-quarter imports are typically relatively high (see chart below), it is unusual to begin the calendar year with the increases seen so far this year. The early increase in pork exports is likely attributable to Easter demand, and expectations of continued depreciation of the U.S. dollar.


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

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