September 3, 2007

US pork stock going up as exports head down

US cold storage stocks of pork at the end of July were up 10 percent from the end of July 2006, signaling an increase in the pork supply in the nation.

This, coupled with a 3.5 percent drop in pork exports for the first time in 15 years, is hinting of excess production which may drive down prices as more supplies are now finding their way to the markets.

However, beef stocks were down 2 percent and chicken stocks were down 11 percent from the previous year, meaning that prices for competing meats would be going up at a time when pork prices are likely to go down.

Chicken prices, especially, have been much higher than last year due to cuts in production.

However, there may be hints that the market may soon be able to absorb the excess production. Pork demand for the first seven months of the year was up 1.7 percent from last year while demand for live hogs during the period was up 3.3 percent.

Although export tonnage is down, value is up. Byproducts exports are strong largely due to demand from China.