US pork output seen at 22.5 billion pounds

US 2010 commercial pork production is estimated at 22.5 billion pounds, based on the USDA's forecast released at its annual Agricultural Outlook Forum.

 

 

In 2009, pork output was 23 billion pounds, the USDA said in its February supply and demand report.

 

US hog prices are forecast to average US$46-$49 per hundredweight for 2010, which is on a national base, 51%-52% lean, live equivalent. In 2009, hog prices averaged US$41.24, down 14% from the previous year and were the lowest since 2003. Hog prices are expected to increase as production tightens and export demand picks up.

 

The USDA said losses among the nation's hog producers the past two years were near the average loss of about US$27 per head in 1998. For 2009, Iowa State University estimated negative returns for hog farrow-to-finish operations at an average of US$26.04 per head. In 2008, returns were a negative US$21.53 per head.

 

Hog producers have lost money in 26 of the last 28 months, the USDA said. "Undoubtedly, much of producer equity gained during the four profitable years of 2004-2007 has been lost during the last two years. But returns are likely to begin to improve later this year," the USDA said.

 

The outlook has improved for 2010, and in January, estimated returns were a negative US$2.23 per head.

 

A smaller herd will help producers' outlooks, but the decline in herd size is being offset some by greater sow productivity. On the other hand, imports of Canadian hogs will be significantly lower for 2010, down about 11% versus 2009 as the number of swine produced there has declined. Canada accounts for 80% of US imports.

 

This season's severe winter weather has cut hog weights and average carcass weights are forecast to be lighter than in 2009. Weights are already down by about one pound so far this year, but second and third quarter weights are expected to follow a more regular pattern than last year.

 

Pork exports for 2010 are forecast to increase 9% to 4.5 billion pounds. Pork exports were 4.1 billion pounds in 2009, 12% below the record setting exports of 4.7 billion in 2008.

 

A majority of the decline in exports was due to lower shipments to China and Hong Kong, where shipments were very strong in 2008 because of an outbreak of blue ear disease in the China pig herd and the Beijing Olympics. Global economic recession also slowed demand for US pork.

 

There was little evidence that H1N1 flu, formerly known as swine flu, had much of an impact on total exports. Shipments to Mexico slipped below year ago levels in May following the H1N1 outbreak there, but there were double-digit increases in every other month of the year, and shipments to Mexico jumped 33% to a record 899 million pounds.

 

Exports are expected to be supported by continued recovery in the global economy and the relatively weak dollar.