January 12, 2006

High production depresses US pork prices 2005

Increased pork production in the US has depressed prices last year as pork demand faltered, according to the US Department of Agriculture (USDA).

The department predicts that 2005 Q4 commercial pork production will reach 5.6 billion pounds--or about 2-percent more than from 2004.

In addition to the seasonally higher numbers of slaughter-ready hogs, a flagging US consumer demand for pork products have also lowered year-to-year slaughter pig prices. This in turn reduced wholesalers' bids for pork products, and packers responded by also lowering prices for hogs. 

However, a silver lining amid the doom and gloom is Japan's accelerated demand this year for US pork due to a favourable US exchange rate. In contrast, the higher valued Euro has made Danish pork products, whose currency is tied to the Euro, more expensive relative to US ones. Japanese total pork imports increased less than 2 percent last year.

US exports the second largest amount of pork to Mexico. However, from January to October last year, Mexico's pork imports from the US were slightly lower from the same period in 2004.