The USDA forecasts U.S. per capita pork consumption at 51.3 pounds per person in 2022, with the number rising to 52.2 pounds in 2023, which would be the first time its exceeded 52 pounds per person since COVID-19. Hence, domestic demand appears to be steady to higher.
Looking to the world market, the U.S. exported 484 million pounds of pork in July, or about 5% lower than in July of 2021. The story is the same as it has been for much of 2022, with positive exports to most countries that have free trade agreements with the U.S. except for Canada, which is down 21% from July of last year, and appreciation of the dollar contributing to generally lower exports to much of Asia except for South Korea, which is up 12% from July of last year.
Based on expectations of continued lower demand from major importing countries, the USDA estimates U.S. pork exports to be 1.53 and 1.82 billion pounds, respectively, in the 3rd and 4th quarters of 2022, bringing the total for the year to 6.495 billion pounds or about 8% below last year. Slightly higher pork exports of 6.515 billion pounds are forecast for 2023.
All-in-all, there is reason for optimism about hog prices. The forecast presented here is for the national weighted average net price on a carcass basis for all transactions for producer-sold barrows and gilts, including negotiated and contract prices. This net price should be more reflective of what producers receive, on average, and often averages a premium of more than $2/cwt over the base price, but for the period of high prices from June through August averaged $110.86/cwt compared to $123.68/cwt for the corresponding net prices for negotiated or spot transactions.
In general, hog prices tend to be higher in the 2nd and 3rd quarters, with lower prices in the 1st and 4th quarters. Consistent with that pattern, prices are forecast to drop to an average of $92.85/cwt for the 4th quarter of 2022, reflecting a balancing of expectations for both lower supplies and exports for the near-term. For 2023, prices are forecast to average $91.19/cwt in the 1st quarter and then rise seasonally to $99.41/cwt and $101.28/cwt in the 2nd and 3rd quarters. However, if supplies prove larger than anticipated or exports continue to soften, lower prices may be realized.
Source : illinois.edu