January 24, 2007

US pork production in 2007 to increase 3 percent

The US commercial pork production is expected to be 21.7 billion pounds in 2007, about 3 percent higher than last year.

The estimates were based on the farrowing intentions reported in the USDA December Quarterly Hogs and Pigs report, and assuming that higher feed costs will restrain growth in dressed weights to their approximate 2006 levels.

Larger pork supplies in 2007 will most likely translate into lower hog prices next year, according to the USDA report. However, several factors could mitigate the effects of large pork supplies on hog prices this year including lower expected first-half US poultry production, which is likely to bolster domestic pork demand.

Foreign demand for US pork products could remain strong.

Pork exports would increase by 5 percent from last year on continued favourable exchange rates and attractive US pork prices. Larger pork supplies and strong pork demand are expected to translate into hog prices ranging between US$42-44 per cwt, for live-equivalent prices of 51-52 percent lean hogs in 2007, 9 percent lower than last year.