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Weekly Review: Pork Exports Are On Fire

by 5m Editor
19 April 2008, at 5:24am

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Pork exports are on fire with February exports up 56.8 percent. January and February exports were up 40.9 percent from a year earlier. The countries that increased their purchases from the U.S. in the first two months of the year were: Canada up 37.5 percent, Russia up 162.9 percent, mainland China and Hong Kong up 361.4 percent and other countries up 76.7 percent from 2007. The countries that reduced their imports of pork from the U.S. for January-February were: Japan down 0.4 percent, Mexico down 3.9 percent, South Korea down 8.9 percent, Taiwan down 24 percent and Australia down 15.6 percent.

The odds now appear to favor 2008 becoming the seventeenth consecutive year with record high pork exports.

In February, the U.S. had a net pork export of 16.8 percent of production. For January-February, the net pork as a percent of production amounted to 14.8 percent of production up 4.06 percentage points from a year earlier. This explains most of the larger live hog growth in demand in recent months compared to consumer demand for pork.

Live hog imports from Canada in February were up 29.6 percent. Feeder pig imports were up 29.8 percent and non-feeder pig imports were up 29.5 percent from last year.

At the end of last week there was a report by Dow Jones news service that Manitoba, Canada, pork producers were preparing to kill hundreds of thousands of weanling pigs over the next several month as U.S. farmers are breaking contracts to buy these three-week-old pigs due to concern over the import of looming country-of-origin-labeling, or COOL, legislation in the U.S., are official with the Manitoba pork course said.

The pigs will only be killed if they cannot be sold for anything. The same report said that the average price for weanling pigs was $40 per head 2 weeks earlier and the sport market had fallen to $5 per head. Five dollars per head is better than nothing and does not require the cost of composting. Therefore, it is uncertain how many pigs will actually be killed.

The average live weights of barrows and gilts in Iowa-Minnesota for the week ending April 12 were at 266.4 pounds down 0.6 pound from a week earlier and down 2 pounds from a year earlier. We now have ten weeks that the weights of hogs in Iowa-Minnesota have been below a year earlier. However, average carcass weight of barrows and gilts under Federal Inspection through the week ending March 29 were holding at one pound above a year earlier. For the week ending April 5, the carcass weights were one pound heavier than a year earlier.

Pork product prices per cwt of carcass continued to increase with the cutout per cwt of carcass at $67.70 per cwt, up $6.13 per cwt Thursday afternoon compared to a week earlier.

According to John Lawrence of Iowa State University, average cost hog producers lost over $39 per hog sold in March on the spot market thanks to strong demand or the results would be much worse with the flood of hogs coming to market.

Live hog prices Friday morning were $5-9.00 per cwt higher compared to a week earlier. Weighted average carcass prices for Friday morning were $6.27-8.77 per cwt higher compared to a week earlier.

Slaughter this week under Federal Inspection is at 2322 thousand head up a whopping 16.7 percent from a year earlier.

Retail pork prices in March at $2.833 per cwt were up 0.3 percent from a month and a year earlier. Thanks to the strong demand or the price would be lower.

5m Editor