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US Pork Outlook Report - November 2004

by 5m Editor
29 November 2004, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the November 2004: Livestock, Dairy and Poultry Outlook Report, highlighting Global Pork Industry data. The report indicates that Q4 hog prices are continuing well last year.

USDA Economic Research Service

Record Per Capita Meat Consumption Expected in 2005

Larger supplies of red meat and poultry are expected to result in record-high per capita meat consumption in 2005. Poultry meat production is expected increase to around 3 percent while pork production will likely increase about 1 percent.

Retail Pork Price
Percent change from previous month
Prices of 51-52 percent lean hogs (live equivalent) are expected to range between $50 and $52 per hundredweight (cwt) in the fourth quarter, 38 percent more than the price during the same period last year. Expected fourth-quarter production of 5,500 million pounds is about the same as the fourth quarter last year. Strong demands by domestic and foreign consumers and higher domestic beef prices are three likely factors supporting hog prices.

Hog trade with Canada will likely be affected as the U.S. Department of Commerce (DOC) returned a positive preliminary decision with respect to the National Pork Producer Council’s (NPPC) petition against imported Canadian slaughter hogs and feeder pigs. Antidumping penalties of about 14 percent are now being collected as Canadian swine come across the border.

The DOC will make final decisions about dumping penalties and countervailing duties in early March. A final finding of “injury” by the International Trade Commission (ITC) in late April 2005 would give any final determination of countervailing duties and/or dumping penalties by DOC, the force of law.

Fourth-Quarter Hog Prices Continue Well Above a Year Ago

Prices for 51-52 percent (live equivalent) hogs averaged $53.68 per cwt in October, 39 percent above a year ago, and fourth-quarter prices are expected to range between $50 and $52 per cwt 38 percent higher than fourth-quarter 2003.

Weekly Hog Slaughter
Percent change from last year
Hog prices continue to be supported by strong domestic and foreign demand for pork products in combination with higher retail beef prices. Demand appears to be particularly strong for picnics, butts, and hams. Picnics and butts are cuts typically favored by Asian consumers. Although large quantities of hams appear to be headed to Mexico, it is likely that a Christmas ham market is also underway in the United States that is lending additional strength to ham prices.

U.S. consumers are paying higher prices for pork products. Fourth-quarter retail pork prices are expected to continue to average in the high $2.80s per pound, about 7 percent above a year ago.

Imported Canadian Hogs Now Subject to Dumping Penalties

As reported last month (http://www.ers.usda.gov/Publications/LDP/), the DOC returned a positive preliminary finding with respect to the petition of the NPPC et al, charging that Canadian swine had been dumped in the United States in 2003
(http://www.ita.doc.gov/media/ FactSheet/1004/swine_101504.html).

As a consequence of the dumping penalties, which range from 13.25 percent to 15.01 percent, U.S. imports of Canadian hogs will likely be reduced in the second half of 2005. From now until the DOC makes its final determinations concerning countervailing duties and dumping in March and the ITC returns its final injury decision in April 2005, import numbers are expected to change very little. Buyers and sellers on both sides of the border are expected to wait for a final disposition of the investigative process before making further production decisions.

It is expected however, that the flow of Canadian slaughter hog numbers will begin to slow after settlement of the currently ongoing strike at Quality Meats in Ontario. Also, because the dumping penalties are assessed on a value basis, it is expected that imports of Canadian swine in 2005 will be comprised of a greater proportion of lower valued feeder pigs. Another consequence of the dumping penalties and slowing imports of Canadian swine is a likely increase in the quantity of Canadian pork products imported by U.S. companies in 2005. U.S. pork imports next year are expected to increase about 7 percent, to 1.2 billion pounds.

51-52 percent lean hogs (live equiv.), 2003 and 2004 quarterly prices

Quarterly U.S. commercial pork production, 2003 and 2004

Links

For more information view the full Livestock, Dairy and Poultry Outlook - November 2004 (pdf)

Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - November 2004