US Pork Outlook Report - August 2010

Pork exports for the first six months of this year were eight per cent higher than the same period of last year and pig prices are strong, according to the USDA Economic Research Service (ERS) August 2010 Livestock, Dairy and Poultry Outlook.
calendar icon 18 August 2010
clock icon 5 minute read


First-half pork exports were 7.9 per cent above the same period last year. Exports to Mexico are particularly strong this year, and account for an increasing share of US pork exports. Lower-than-expected live swine imports this year and a smaller increase next year are reflected in slightly lower commercial pork forecasts for 2010 and 2011.

The average price of 51 to 52 per cent live equivalent hogs is expected to be $54 to $55 per hundredweight (cwt) in 2010, almost 33 per cent above average prices in 2009. Strong hog prices are attributable to lower hog numbers and continued strong consumer demand for pork products.

First-Half Pork Exports Show Strong Increase

In the first half of 2010, US exporters shipped 2.1 billion pounds of pork to foreign destinations. First-half pork exports were 7.9 per cent greater than in the same period last year, while June exports of 365 million pounds were 23 per cent ahead of June 2009. A large part of the June increase is attributable to year-over-year greater exports to Japan (+43.1 per cent) and to Mexico (+30.2 per cent). The 10 largest export destinations for the first half of 2010 are listed below, along with year-over-year comparisons of export volumes and shares. The listing shows that while Japan remains by far the largest US export market, shipments to Mexico have accelerated this year, adding to Mexico’s importance as an export market.

Increased economic activity in countries that import significant volumes of US pork products are expected to drive second-half US exports more than 10 per cent higher than the same period of 2009. Export forecasts for third and fourth quarter of 2010 are 1.1 billion pounds and 1.2 billion pounds, respectively. Total exports for 2010 are expected to be 4.5 billion pounds, 9.1 per cent above 2009. Exports in 2011 are expected to be 4.7 billion pounds, 4.6 per cent above 2010.

US imports of live swine fell 15 per cent in the first half of 2010, continuing a trend that began in 2008. However, US swine finishers are increasing imports of selected categories of Canadian swine: feeder pigs (animals weighing between 15 and 50 pounds), and 'not-for-immediate-slaughter' hogs, weighing more than 110 pounds. Feeder pig imports increased more than 33 per cent over the first half of 2009, and hogs weighing more than 110 pounds increased almost 60 per cent. Increased imports of these two categories of swine are likely attributable to strong US hog prices from reduced hog numbers and strong pork demand, and also to favorable cost considerations for Canadian producers.

Nonetheless, total US imports of live swine for 2010 are expected to total just under 5.8 million head in 2010, down 10 per cent from 2009. US live swine imports next year are expected to be 5.9 million head, an increase of 2.5 per cent over the forecast for 2010. Higher grain prices, an uncertain slaughter capacity situation in Ontario, and continued strong US demand for live swine will likely bring more Canadian swine into the US next year.

In anticipation of lower imports of live Canadian swine this year and a smaller year-over-year increase next year, USDA scaled back US pork production estimates slightly in both 2010 and 2011. Commercial pork production was lowered by nine million pounds in 2010, to reflect lower imports, actual commercial production in June and expectations for slightly higher dressed weights in the third quarter. Commercial pork production in 2011 was lowered by 30 million pounds to reflect the lower swine import forecast. Production in 2010 is expected to be 22.2 billion pounds – 3.3 per cent below 2009 – and 22.7 billion pounds in 2011 – 1.9 per cent above 2010 forecast production.

Third-quarter 2010 prices for 51 to 52 per cent live equivalent hogs are expected to average $57 to $59 per cwt and to average $49 to $53 per cwt in the fourth quarter. The third-quarter price forecast is more than 49 per cent above a year ago. The fourth-quarter forecast is almost 24 per cent above the fourth quarter of 2009. Strong hog prices continue to reflect lower US hog numbers in the face of continued strong foreign and domestic pork demand. For 2011, hog prices are expected to average $53 to $57 per cwt, about half a per cent above prices in 2011.

Retail Pork Prices Skyrocket – Again

Retail pork prices were $3.18 per pound in July – a new record – breaking the previous record-high established just last month. Record retail prices reflect lower pork supplies from reduced hog numbers. It is significant that the cost effects from lower pork supplies are no longer being fully absorbed along the supply chain but are largely being passed along to the retail consumer. Retail prices are expected to average in the low $3.00-per-pound range both this year and in 2011.

Further Reading

- You can view the full report by clicking here.

August 2010
© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.