CME: Trade to Continue to Impact Pork Market in 2010

US - The latest USDA projections for beef and pork output in 2010 showed that supplies next year are going to be even tighter than earlier predicted, write Steve Meyer and Len Steiner.

Pork production estimates for 2009 were left unchanged and currently USDA expects total supplies for the current year to be 23.052 billion pounds, 1.3 per cent lower than the prior year. As with beef, USDA reduced 2010 pork production estimates by 25 million pounds and at 22.410 billion pounds, next year’s pork production is expected to be some 642 million pounds or 2.8 per cent lower than 2009 levels.

Trade will continue to be a significant factor for beef and pork markets in 2010. USDA raised its 2009 and 2010 estimates of US beef and pork exports. Beef exports for 2009 are currently projected to be 1.846 billion pounds, 21 million pounds higher than the earlier forecast but still 2 per cent lower than 2008 levels. For 2010, USDA projects beef exports to be 1.985 billion pounds, a 60 million pound increase over the November estimate and 7.5 per cent larger than in 2009. Pork exports for 2009 were raised by 41 million pounds to 4.176 billion pounds but current year volume is still 10.5 per cent lower than in 2009. Pork exports are expected to bounce back in 2010 and the latest USDA estimate pegs 2010 US pork exports at 4.6 billion pounds, 10.1 per cent higher than in 2009. At this point we are looking at a situation where pork exports in 2010 will be close to 2008 levels at a time when US pork production in 2010 is expected to be almost 1 billion pounds or 4 per cent lower than it was that year. On page 2 of the link below, we have included the supply and price summary for the week ending 12 December 2009.