March 17, 2008

US 2008 pork output projected to rise 5.4 percent
 

Pork production for 2008 is forecast to have an increase of 5.4 percent, but hog demand and slaughter rate may move slow, leading to overproduction.

USDA forecast for 2008 pork production shows an increase of 5.4 percent from 2007, while the forecast for 2008 pork imports has decreased 4.4 percent from 2007. Pork exports for 2008 is also forecast to rise as much as 15.8 percent.

Due to the 2008 pork production forecast, live hog prices in Iowa are expected to average between US$41-44 per hundredweight. Mid-week future prices for lean hog had a live price of about mid US$50 per hundredweight for June 2008 to April 2009.

It is very likely that live hog demand and slaughter rate would not be able to keep pace with production, which would force down prices, moving them closer to current hog prices offered by the futures market in the coming year.

Meanwhile, live hog prices have declined from a week ago, and the week's slaughter marks 2.2 million heads, up 1.9 percent from a week ago and up 6.3 percent from a year ago.

Pork exports in January was also up 26.6 percent from January 2007.

In addition, percentage of hogs sold in the 2007 US spot market has increased 0.6 percent to 9.2 percent from 8.6 percent in 2006, according to a study by the University of Missouri.