Diving overview:
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Experts say increased exports will ease pressures facing the U.S. pork market, but the impact on the broader market will not be as great as the impact of California's Prop. 12 sales declines, experts say.
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Shipments of sirloin, rump, ham and other cuts to Mexico, Japan and other global trading partners are expected to increase about 9 percent this year, said Brett Stuart, founder and president of market research firm Global Agritrends. He noted that competitiveness had increased following the liquidation of pig herds across Europe.
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Exports are typically a bright spot, accounting for more than a quarter of U.S. pork production each year, but Proposition 12 animal feeding requirements have recently hampered sales in California and forced companies to move product to other states. “We don’t have that much traction in the market,” Stewart said of pork prices.
Dive Insights:
Pork producers are experiencing their worst year on record, with weak consumer demand unable to keep up with high production levels and prices remaining very low.
Dr Steve Meyers, chief economist at price risk management firm Ever.Ag, said the increase in sow slaughter last year from May to October put pressure on the market. He explained that the rally was in response to an increase in livestock liquidations at Smithfield Foods in Missouri. Several producers lost their contracts..
Despite the decline in the breeding herd, Meyers said production has stayed about 100 percent because more pigs are available per litter. All-time high 11.53 In March. Producers have been able to effectively deal with much of the oversupply thanks to strong export demand.
“Slaughter volumes will increase and weights will increase to some extent, but per capita availability will decrease. How about that? Well, it’s called exporting.” Meyers spoke at the World Pork Expo outlook this week in Des Moines, Iowa.
Pork exports are estimated to reach 7.4 billion pounds, up 9% from last year, with Mexico, Japan and South Korea among the largest markets for U.S. pork, according to Global Agritrends data obtained by Agriculture Dive.
According to data from the Department of Agriculture, pork exports surged 14% in April alone. On the other hand, poultry exports decreased by 10% and beef exports by 3%.
The United States is also gaining market share in the Caribbean and other global regions that have historically relied on European exports. Countries like Germany and the Netherlands have drastically reduced their pig herds due to inflation and unfavorable climate policies, Stewart said.
Increased exports have been a lifeline for pork prices as domestic consumer demand weakened following the implementation of California's Proposition 12 animal husbandry law earlier this year. The state accounts for 13% of national pork consumption, but sales have fallen about 20% since January as prices have soared, Stewart said.
“Having this increase in exports has become very important for U.S. pricing,” he said.
