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US Pork Outlook Report - June 2009

by 5m Editor
17 June 2009, at 12:00am

By USDA, Economic Research Service - This article is an extract from the June 2009 issue of Livestock, Dairy and Poultry Outlook Report.

Highlights

Higher expected feed prices and relatively weak hog prices in 2010 should result in 2010 pork production of 22.3 billion pounds, down 1.8 per cent. In the face of relatively weak hog prices and higher feed prices, producers are expected to hold down growth in hog weights.

Pork Production To Fall in 2010

Projected pork production for 2009 was increased from last month. Higher slaughter weights in the second quarter have boosted the production forecast in that quarter, which more than offsets the reduced second half forecast. Imports of hogs are forecast lower as higher feed prices and relatively weak US hog prices reduce producer returns and, coupled with a weaker US dollar, reduce incentives to import hogs. For 2009, pork production is forecast at 22.7 billion pounds, down 2.6 per cent from 2008.

Higher expected feed prices and relatively weak hog prices in 2010 should result in 2010 pork production of 22.3 billion pounds, down 1.8 per cent. In the face of relatively weak hog prices and higher feed prices, producers are expected to hold down growth in hog weights. Imports of hogs are forecast lower as weak returns limit producer incentives to feed out Canadian hogs. The Quarterly Hogs and Pigs report, to be released on 26 June, will provide a better indication of producer farrowing intentions through the end of 2009.

Weak pork demand is pressuring hog and pork prices. The National Base Lean hog price for the second quarter is forecast at $43 to $44 dollars per hundredweight (cwt; live equivalent), about 17 per cent below 2008. Prices will likely rise seasonally in the third quarter but as slaughter increases further in the fourth quarter, prices will drop back to the low $40s. As supplies tighten in line with slaughter reductions and little increase in carcass weights, hog prices are expected to increase. For 2010, the National Base Lean hog price (live equivalent) is forecast to average $48 to $51 per cwt.

Further Reading

- You can view the full report by clicking here.