The small year-over-year increase in exports seen so far in 2010 is less than expected. Nonetheless, 2010 pork export volumes appear to be contributing to total US pork demand that is sufficiently large to maintain very strong hog and domestic pork prices in a US market environment where supplies are year-over-year lower.
Exports to North America Free-Trade Agreement (NAFTA) partners Mexico and Canada continued year-over-year higher in August, while shipments to most Asian countries continued relatively weak.
US pork imports in August were 83.2 million lbs., an increase of more than 23% over August 2009. For the first eight months of 2010, imports ran about 3.8% ahead of the same period last year. Larger-than-anticipated imports in August are attributable to significantly larger shipments from the two largest sources for US pork imports, Canada and Denmark.
Imports from Canada were 19.7% larger than a year ago; imports from Denmark were almost 31% greater than in August 2009. Imports from Denmark, and Canada in particular, could have been larger in the late summer in order to meet US demand for selected pork cuts that were in diminished supply due to lower US pork production.
US imports of live swine, 100% of which were from Canada in August, were year-over-year larger, by 6.7%, for the first time since early 2008. US imports of Canadian finishing animals were 10.4% higher than last August. Purebred breeding animals also registered an increase of 8.1%. Larger volumes of live swine imports suggest that strong US hog prices and lower animal numbers have gained traction to the degree that imports have turned upwards for the first time in more than two years.
In September, for the fourth month in a row, retail pork prices set an all-time high at $3.30 per lb. The price reflects lower pork supplies and good consumer demand for pork products. Reports of tightness in availability of some pork cuts in some markets across the US continued. This situation likely contributed to the 6.8-cent increase compared with prices in August. For the rest of 2010, retail pork prices are expected to average in the low $3-per-pound range.