March 31, 2008

US pork exports continues to sustain optimism in the market

Even as record hog slaughter plague US producers, causing losses of US$30-US$40 per head, exports have been able to advance rapidly enough to partially offset producer losses.

US producers would have suffered to a greater extent if not for the growth seen in hog exports, according to  University of Missouri agricultural economists Glenn Grimes and Ron Plain.

Pork exports for January 2008 jumped 26.6 percent from a year earlier and were a record high for a single month.

Net pork exports represented 13 percent of US hog production, up 19.3 percent from a year earlier.

Pork exports in January to major markets such as Japan were down 10.4 percent and also dropped by 7.1 percent to Mexico. However, shipments rose by 37.6 percent to Canada, to Russia by 128.7 percent, and to mainland China and Hong Kong by 249.3 percent.

Taiwan bought 14.8 percent less US pork in January, Australia 15.8 percent less, but other countries bought 84.1 percent more.

Even though US pork imports barely increased, total live hog imports from Canada went up 40.3 percent in the first month of 2008 while feeder pig imports in January climbed 39.3 percent over the same period in 2007.

Meanwhile, live hog prices are down sharply, dropping 14.2 percent in January and February, compared to the same period a year ago. Still, with a 12-percent increase in slaughter, prices would have been much lower had it not been for the strong export growth.