July 25, 2011

US pork exports will leap 23% or more this year on the back of surging demand and prices in China, a US farm-industry research firm said.

US pork shipments to all countries, including China, may rise to 2.35 million tonnes this year from an estimated 1.92 million tonnes last year, according to Brett Stuart, the co-founder of the firm.

The US is exporting about 24% of its pork output this year, with potential rapid growth through the summer, Stuart said. About 19% was exported last year, up from 18% in 2009, government data show.

Hog futures have climbed 21% on the Chicago Mercantile Exchange in the past year, while wholesale-pork prices are up 20% from a year ago, government data show.

The increase in exports has reduced US net supplies, contributing to higher pork prices in the country, Stuart said.

In the first five months of this year, shipments to Hong Kong and the Chinese mainland were a combined 23,482.48 tonnes, up 37% from a year earlier, USDA data show.

China has announced plans to release pork reserves into the market to help stabilise prices. The government has 200,000 tonnes of reserves, which make up 0.4% of China's average annual consumption, or enough for 1.5 days. Chinese consumers are eating roughly 140,000 tonnes a day.

The reserves were insufficient to make a difference if China had a shortfall in pork, Stuart said.

China produced an estimated 51.07 million tonnes of the meat last year, and that should be able to satisfy 98% of rising domestic demand, he said, adding that currently hog farmers are making enough money to encourage herd expansion, as they may add 2.5-3 million sows over the next year.