US hog producers to keep eyes on Mexico, Russia and China

As North American pork producers strive to improve their profitability, the key markets they should look out for this year are China, Russia and Mexico.

During 2009, US pork producers lost about US$25 per hog marketed despite lower hog production, while the strong Canadian dollar made things more difficult for Canadian producers.

University of Missouri agricultural economist Ron Plain said the recession did not help hog prices, but a rebound in economic activity and consumer confidence will be good for all meat prices.

What happens in the US domestic market and Canada are huge factors, but exports are also a key driver of hog prices, he said.

Japan is the largest foreign importer of US pork, and the Japanese market is a reliable source of US pork purchases. Mexico is a fairly volatile market but demand there has been picking up and purchases have expanded in late 2009 and early this year, and hopefully the demand will remain stable through 2010, said Ron Plain.

China bought a lot of US pork in 2008 but not much in 2009. Russia is also an unstable market.

With that in mind, Ron Plain concluded that US pork producers should be watching out for Mexico, Russia and China because of their volatility.