Oct. 31 USDA monthly cold stocks data showed pork products accumulating at faster rates than expected. Part of the accumulation might also have been attributable to slightly higher fourth-quarter pork production, but with retail pork prices at record highs, US consumers are likely buying less pork.
October pork exports also fell below expectations, which suggests despite a competitively priced US dollar, high US pork prices likely caused foreign buyers to back away from US pork products. Record-high retail prices and competitive chicken prices on the domestic side, lower than expected export demand and slightly higher production may be weighing on wholesale pork prices.
For the rest of 2010, upward adjustments in fourth-quarter slaughter and dressed weights resulted in an expected commercial pork production estimate of just more than 6 billion lbs, about 0.3% above one year earlier. This would be the first instance of year-over-year increased production since the third quarter of 2009. The average fourth-quarter price of live equivalent 51%-52% lean hogs is expected to be $49-$50 per cwt, more than 20% above the same period in 2009.
Totaling just slightly below 22.6 billion lbs., USDA’s 2011 commercial pork production forecast is expected to be about 1% above production in 2010. Hog prices next year are likely to average $53-$57 per cwt, less than 1% below the estimated average annual price for 2010.
Totaling 339 million lbs., October pork exports were 9.5% below a year earlier, with shipments to most major destinations falling below October 2009 levels. Only Mexico, China and the Dominican Republic bought more US pork products in October compared with a year ago. Seven of the 10-largest foreign destinations in October registered year-over-year declines. With the October exchange rate of the US dollar highly competitive in most foreign markets, high US pork prices were likely a major contributor to lower October exports.
In October, US pork imports totaled 77.5 million lbs., 6.8% above a year earlier. More than half of that increase is attributable to Canada, whose shipments to the US were up about 5%. Relatively high US pork prices likely created market opportunities for Canadian pork products, despite the US dollar’s depreciation against the Canadian dollar in October and November. October imports of live swine were slightly above 457,000 head, almost 9% below a year ago. With the exception of breeding animals (greater than 50 kgs) and animals for immediate slaughter, all categories of live imports were lower in October.