Summary

Retail pork prices are increasing modestly this year, with larger increases likely next year. Pork exports continued their sharp upward trajectory in July.

Retail Pork Prices Increase Modestly

Retail pork prices for July and August averaged $2.99 per pound, 1.9 per cent above the same period last year. Higher summer retail prices reflect strong hog prices, which in turn were likely brought about by very strong export demand during this period. Retail pork prices for 2008 are expected to be in the low $2.90s per pound for the year, up about 1 per cent, year over year. This modest increase in retail pork prices—at the same time that 2008 per-capita pork consumption is expected to be almost 5.7 percent below 2007—is likely attributable, in part, to availability of competitively priced pork substitutes such as ground beef and chicken breasts. Retail pork prices in 2009 are expected to average in the high $2.90s per pound, up almost 3 per cent from this year.

July Exports Continue Upward Trajectory

Pork exports for July came in at more than 409 million pounds, slightly more than 86 percent above exports in July 2007. For the first 7 months of 2008, total exports were 2.9 billion pounds, almost 71 per cent above the same period last year. Exports as a percentage of US commercial pork production this year are expected to be more than 23 per cent, compared with 14.3 per cent for 2007. The 10 largest destination markets for US pork products for the January-July 2008 period are listed below. These 10 markets, taken together, have accounted for 92 per cent of US pork exports so far in 2008.

US pork imports in July were slightly more than 68 million pounds, down more than 17 per cent from a year ago, and down 15 per cent for the first 7 months of the year, compared with the same period last year. The reduction in imports is more than likely due to the low value of the US dollar relative to currencies of countries exporting pork to the United States. So far in 2008, imports from Canada and Denmark have accounted for about 85 per cent of total pork imports, down from 90 per cent a year ago. This reduction in the combined share of pork from Canada and Denmark is attributable to small share increases this year of Mexico, Poland and the Netherlands.

Live swine imports from Canada in July were close to 744,000 head, more than 5 per cent below live imports in July 2007. The reduction is attributable to lower imports of heavier-weight finishing animals and slaughter-ready hogs. Lower Canadian exports of these categories are likely due to increased packer demand in Manitoba and Ontario. Also, higher energy/transport costs probably reduce incentives to export heavier swine to the United States.

Further Reading

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