2015 Pork Production Reflects Sector Recovery From Disease Problems of 2014
With less than 2 months left in 2015, USDA is projecting commercial pork production for the year at 24.5 billion pounds, a volume 7.3 percent greater than a year ago, when Porcine Epidemic Diarrhea (PEDv) reduced hog numbers. The 2015 pork production estimate is 5.7 percent higher than production in 2013, before the significant onset of PEDv. The annual production forecast incorporates a slightly smaller projection for fourth-quarter production compared with last month’s forecast, due to lower than expected hog slaughter during the quarter. Fourthquarter commercial pork production is expected to be 6.5 billion pounds, 5.4 percent greater than the same period a year ago. The fourth-quarter price of live equivalent 51-52 percent lean hogs is expected to average $46-$48. For 2015, hog prices will likely average $50.82. For the first half of 2016, commercial pork production is expected to be nearly equal to the first half of 2015, at 12.1 billion pounds. First-quarter prices are expected to average $48-$50; second-quarter prices will likely average $50-$54.
Strong September Pork Exports Mostly Reflect Sector’s Recovery From PEDv
September pork exports were 404 million pounds, 17.8 percent higher than a year ago. The strong percentage change for September is more a reflection of severely reduced September exports last year, due to PEDv-reduced supplies. Nevertheless, September trade data completes the third quarter, with pork exports totaling almost 1.2 billion pounds, a volume 7.5 percent higher than the same period of 2014. The 10 largest third-quarter destinations for U.S. pork are listed below.
Third-quarter pork imports were 269 million pounds, an increase of 5 percent compared with the same period last year. Canada and the European Union together accounted for 97 percent of third-quarter imports. While increases in third-quarter imports in 2014—12-percent over the same period of 2013—were probably attributable to PEDv-reduced U.S. pork supplies, the 5-percent increase this year isvery likely due in large part to the high-valued U.S. dollar, particularly as it affected the Canadian dollar and imports from Canada. In the third quarter of 2014, one Canadian dollar cost $0.92. This year in the same period, a Canadian dollar cost$0.76, a decline of 17 percent. Thus, in the July-September period this year, the decline in Canada’s currency values likely made Canadian pork more competitive with U.S. pork. In the third quarter, Canada increased both its volume shipments tothe United States (+7.8 percent) and its share of U.S. imports (77 percent this year versus 75 percent a year earlier).
U.S. imports of live Canadian swine also increased in the third quarter: total imports of 1.4 million head were 8.4 percent higher than a year ago. Categories showing the strongest gains during the quarter were animals weighing 23-50 kilos (+30.6 percent) and hogs for immediate slaughter (+18.2 percent). Gains in both of these categories are likely due to recent willingness of several U.S. packers to accept animals of Canadian origin.
Source: USDA