May 23, 2008

US pork production and exports to fall in 2009, retail prices up
 

US pork production and export volume are expected to fall while pork retail prices are projected to increase in 2009, according to the USDA Livestock, Poultry and Dairy Outlook released May 16, 2008.

Commercial pork production is expected to reach 22.9 billion pounds next year, down 2.4 percent from the 2008 production forecast, the report said.

The report states that the lowered forecast is due to continued negative returns from record-high feed costs and falling numbers of breeding herd, as producers are looking to farrow fewer sows.

Lower quarterly farrowings are expected to extend through 2009 and lower hog supplies next year should result in prices averaging between US$46-50 per cwt for live equivalent 51-52 percent hogs, up more than 9 percent from 2008's expected prices, according to USDA.

The report also said pork retail prices are also likely to average US$2.9 per pound, amounting to a year-on-year increase of about 1 percent.

USDA pork export forecast for 2009 is 3.98 billion pounds, down 7.5 percent from 2008's export expectations of 4.3 billion pounds. This is due to the assumption that China would be able to control its blue-ear disease problems by then, which would greatly reduce pork import volumes, said the report.

In addition, the USDA expects a lower 2008 commercial pork production of 52 million pounds due to lower estimated imports of Canadian slaughter hogs in April. Pork production is expected to be 23.5 billion pounds, up 7 percent from 2007.

Second quarter 2008 prices of live equivalent 51-52 percent lean hogs will average between US$46-48 per cwt, according to USDA estimations. For the year, USDA estimates that prices would average between US$43-45 per cwt, down nearly 7 percent from 2007.