USDA increased the forecast for second-quarter commercial pork production by 60 million lbs, to account for higher than expected hog slaughter in May and continued larger kills in June than initially expected. Average dressed weights for the quarter were adjusted downward as the industry reestablishes a more normal seasonal pattern, compared with a year ago when PEDv resulted in excess finishing space and tight pork supplies encouraged producers to feed hogs to heavier weights. Second-quarter commercial pork production is expected to be 5.9 billion pounds, almost 7 percent above the same period last year. The second-quarter average price of live equivalent 51-52 percent lean hogs was increased to $54-$55 per cwt., more than 36 percent below a year earlier but still high enough to yield a positive feeding spread to most hog producers.
The retail pork composite price dropped sharply in April to $3.77 per lb, almost 5 percent lower than a year ago and almost $0.11 per lb below the March 2015 price. Lower retail prices may reflect larger than anticipated supplies of pork—April ending cold stock levels were more than 20 percent higher than a year earlier—that were passed along to the retail consumer. For the balance of the quarter, the retail composite pork price is expected to average in the low $3.80s per lb and in the high $3.70s per lb for 2015.
USDA will release the Quarterly Hogs and Pigs report on June 26, 2015. The report will show survey results of June 1 hog and pig inventories, pig crops, and producers’ farrowing intentions. The report is available at
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=10 86
Exports Surge in April
U.S. pork exports were year-over-year higher in April for the first time since June 2014. At more than 483 million lbs, exports were almost 11 percent greater than exports a year earlier. The summary table below indicates that strong exports to Japan, Mexico, and South Korea accounted for much of the year-over-year increase.
What was notable about April export volumes to these three countries was that in each case, the U.S. dollar exchange rate had shown a significant appreciation compared with April 2014. In terms of Japanese yen, the U.S. dollar was 16.6 percent more expensive than in April 2014. The U.S. dollar was 4 percent higher in terms of South Korean won than a year earlier, and for Mexican buyers of U.S. pork, U.S. dollars were 16.3 percent more expensive to buy with pesos.
The surge in U.S. pork exports in April, coming at a time when the U.S. dollar exchange rate for most foreign buyers was higher than a year earlier, is at least partially attributable to low U.S. spring pork prices. Federally inspected pork production in April was 8.2 percent higher than in April 2014—when porcine epidemic diarrhea was active in U.S. hog herds— and 6.5 percent above production in April 2013. U.S. pork prices in April 2015 reflected heavy supplies as industry production rates quickly recovered from PED. Average wholesale pork carcass cutout prices in April 2015 were 45 percent below last year and 19 percent below prices in 2013. It is likely that low U.S. pork prices in April offset some of the
appreciated cost of U.S. dollars to foreign buyers, restoring a degree of export competitiveness that is lost when the dollar appreciates.
USDA adjusted its second-quarter pork export forecast to reflect strong April shipments. Second-quarter exports are expected to be 1.250 billion pounds, 2.4 percent higher than a year earlier. For 2015, total pork exports are expected to be 4.915 billion lbs, about 1 percent above exports last year.
Source: USDA