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US Pork Outlook – June 2011

Lower dressed weights are forecast for this year and next, while the estimate for pork exports in 2011 has been increased to 15 per cent above last year's level, according to the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service.

15 June 2011

4 minute read

Summary

Pork exports for 2011 were revised upward to 4.872 billion pounds, up almost 15.3 per cent over 2010, due mostly to a greater-than-expected demand in the first quarter of 2011 from Asian markets like South Korea and China. Tighter-than-anticipated corn supplies are expected to translate to higher feed costs for producers for the rest of 2011 and into 2012, decreasing the expected dressed weights of hogs. Lighter weights are expected to marginally lower commercial production to 22,615 million pounds in 2011 and 22,910 million pounds in 2012.

Higher Feed Prices Expected to Pressure Hog Weights

Tight feed supplies are expected to put upward pressure on feed prices through the 2011/12 crop year. Producers may see their profitability slip because of high corn and soybean meal prices. It is expected that these high costs likely will encourage producers to remain as current as possible in marketing their animals to limit the time on feed. As a result, forecast average hog weights for 2011 and 2012 were reduced from May.

Given the reduction in hog weights, the forecast for pork production was reduced slightly for both 2011 and 2012. Commercial pork production estimates for 2011 were reduced by 10 million pounds from May to 22.615 billion pounds, and the forecast for 2012 was lowered by 40 million pounds to 22.91 billion pounds.

Strong Pork Exports Continue in April

April US pork exports were over 421 million pounds, up about 19.5 per cent from year earlier. Second-quarter pork exports are forecast to be almost 1.27 billion pounds, up about 17 per cent from the same period a year ago. Annual US pork exports for 2011 were revised upward from May forecasts to 4.872 billion pounds, about 15.3 per cent higher than a year ago and are expected to account for 21.5 per cent of US commercial pork production.

Larger-than-expected pork exports are due mostly to the continued low US dollar exchange value vis-à-vis the rest of the world, coupled with Foot and Mouth Disease issues in South Korea and a lack of Asian production capacity to meet demand. Year to date, the five largest destinations of US pork exports continue to be Japan, Mexico, South Korea, Canada and China. The year-over-year pork export growth in April was due mainly to increases in sales to South Korea, China and Russia.

April US imports of pork were more than 68 million pounds, up 5.8 per cent from a year ago. Second-quarter imports are expected to be 220 million pounds. Year-over-year, April imports from Canada, Denmark and Italy were higher, while imports from Poland and Mexico were lower. Canada accounted for 76.5 per cent of US imports versus 78.7 per cent in April 2010.

Live swine imports were 437,000 head in April, down 12.5 per cent from last year. Annual live hog imports to the US were revised down slightly to 5,842,000 head. Live swine exports totalled 1,846 head for April, 112 per cent higher than a year ago.