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Weekly Review: Japan Still Reigning as US Customer

by 5m Editor
21 February 2009, at 8:20am

US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

Pork exports for 2008 were up 48.6 per cent from 12 months earlier. Pork imports were down 14.1 per cent last year from a year earlier.

Net pork exports as a percent of production in 2008 was up to 16.4 per cent. This compares with 9.9 per cent in 2007. This was the major reason why live hog demand was up 6 per cent while consumer demand for pork was down 3.5 per cent from 12 months earlier.

Japan continues to be our number one customer of pork in 2008 and exports were up 23.4 per cent, China and Hong Kong, was up 139.8 percent, Mexico was up 49.3 per cent, Canada was up 14.9 per cent, South Korea was up 12.1 per cent, Russia was up 76 per cent, Taiwan was up 70.7 per cent, Australia was up 40.3 per cent and other countries were up 83.8 per cent from 2007.

December pork exports were up 3.2 per cent from 2007. China and Hong Kong were down 27.1 per cent in December from a year earlier. USDA is estimating pork exports in 2009 will be down about 15 per cent from 2008.

Pork cutout this Thursday afternoon at $57.22 per cwt was down $1.32 per cwt. With the weak consumer demand, pork cutout is not likely to increase much until we reduce slaughter more than we have to date. Loins at $72.06 per cwt was down $4.64 per cwt, Boston butts at $63.75 per cwt down $1.33 per cwt, hams at $40.03 per cwt down $1.42 per cwt and bellies at $72.26 per cwt down $0.10 per cwt from a week earlier.

Live hog weights for barrows and gilts in Iowa-Minnesota trended lower seasonally with the weight at 268.2 pounds down 0.8 pound from a week earlier but still up 1.2 pounds from a year earlier; continuing to support the belief that marketings are not as current as they were last fall.

Good news from north of the border. Canada's hog herd was down 10.2 per cent on 1 January from a year earlier. The breeding herd was down 7.1 per cent, sows and bred gilts were down 6.9 per cent from 12 months earlier.

Even with nearly a seven percent reduction in the sow herd, the farrowing intentions for January-March are only down 3.4 per cent and the April-June intentions are only down 2.6 per cent. With some growth likely in litter size, pig production in the first half of the year may be down only between two and three per cent from last year. With the weak consumer demand we need more reduction in the North American sow herd than we have had to date. The most recent sow and gilt slaughter data continues to support the belief that producers are not currently reducing the breeding herd. Sow slaughter in January was down 4.1 per cent after adjusting for the smaller herd which means the number of sows slaughtered was down between six and seven percent from a year earlier. The bottom line is that additional reductions in the hog herd in North America is needed to stop the bleeding.

Live hog prices this Friday were $1.00 – 2.00 higher per cwt compared to last week. Weighted average negotiated carcass prices were $0.10-4.91 per cwt lower Friday morning compared to seven days earlier.

The top live prices Friday morning for select markets were: Peoria $36.50 per cwt, Zumbrota, Minnesota, $39.00 per cwt and interior Missouri $43.00 per cwt. The weighted average negotiated carcass prices Friday morning by areas were: western Cornbelt $57.92 per cwt, eastern Cornbelt $55.73 per cwt, Iowa-Minnesota $57.00 per cwt and nation $56.47 per cwt.

Slaughter this week under Federal Inspection was estimated at 2214 thousand head up 0.4 per cent from a year earlier.