Can increased export demand rescue the US pork industry?

By Elizabeth Schroeder |17 June 2024 | 9:18 am

With domestic consumption of pork in the US declining sharply, experts are hoping that increased demand from Mexico and other trading partners could strengthen prices.

According to agriculturedive.com, US pork producers were recovering from one of the worst years on record due to weak consumer demand, which had not kept up with high levels of production, putting downward pressure on prices.

Speaking during an outlook at the World Pork Expo held during the week of 10 June in Des Moines, Iowa, Dr Steve Meyers, chief economist at Ever.Ag (a price risk management firm), said sow slaughter numbers were high between May and October last year, which placed the market under pressure.

“He attributed the rally to increased herd liquidation from Smithfield Foods in Missouri, where several producers lost their contracts,” the report said.

Meyers explained that despite the breeding herd being markedly reduced, production had remained at approximately 100% because a higher number of pigs were “being saved per litter, which reached an all-time high of 11.53 [pigs per litter] in March”.

According to the US Department of Agriculture’s National Agricultural Statistics Service, Quarterly Hogs and Pigs report published on 1 March, there were 74,6 million hogs and pigs on US farms, which was a 1% increase year-on-year, but the figure was down 2% on 1 December 2023.

Other key findings in the report were:

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Of the 74,6 million hogs and pigs, 68,6 million were market hogs, while 6,02 million were kept for breeding.

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Between December 2023 and February 2024, 33,1 million hogs and pigs were weaned on US farms, up 2% from the same time period one year earlier.

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US pig producers intended to have 2,92 million sows farrow between March and May 2024, and 2,99 million sows farrow between June and August 2024.

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Iowa hog producers accounted for the largest inventory among the states, at 25,2 million head, Minnesota had the second largest inventory at 9,10 million head, while North Carolina was third with 7,4 million head.

Due to strong export demand, producers had, however, been able to effectively market much of the excess supply.

According to Global Agritrends data obtained by agriculturedive.com, pork exports were estimated to reach 3,5 billion kilograms, or a 9% increase on 2023 figures, with Mexico, Japan and South Korea among the largest markets for US pork.

“The US is also capturing market share from the Caribbean and other global regions that have historically relied on exports from Europe. Countries [such as] Germany and the Netherlands have significantly trimmed their swine herds due to inflation and unfavourable climate policies,” according to Brett Stuart, president of market research firm, Global Agritrends.

He explained that the increase in export volumes had been “a lifeline for pork prices” as domestic consumer demand weakened following the implementation of the Prop 12 animal housing law in California at the beginning of 2024.