Pork Production in 2015 Expected To Rebound
Pork production is expected to increase in 2015, as the U.S. pork industry leverages experience gained this year in treating Porcine Epidemic Diarrhea (PEDv). Pork production is expected to increase almost 3 percent next year, to 23.3 billion pounds. Increases derive from year-over-year larger farrowings, as producers respond to prospects of higher returns from continued strong hog prices and moderate feed costs. Litter rates are also expected to be a source of increased production next year as producers gain facility in managing the effects of the disease on new-born litters. Year-over-year increases in average dressed weights are expected to moderate in 2015, but to increase nonetheless, with gains expected to average about a pound and a half over those of 2014.
Expected-higher 2015 pork production will likely weigh on hog prices next year: average prices of live equivalent 51-52 percent lean hogs are expected to average $70-$76 per cwt. While this is about 6 percent below expected average prices this year, it is just shy of 13 percent above hog prices in 2013. Relatively strong hog prices next year, at the same time that pork production is expected to increase, will reflect a continued tight supply in the U.S. meat-animal complex (particularly of beef), as well as expected-solid export demand. U.S. pork exports next year are expected to be 5 billion pounds, 3.8 percent larger than forecast exports in 2014. U.S. consumers will likely pay somewhat less at retail for pork products next year. Retail prices will likely average in the high $3.70s-low $3.80s per pound, compared with an annual average this year in the low $3.90s per pound, but still quite a bit higher than the 5-year average retail price of $3.31 per pound.
First-Half 2014 Pork Production Showing Effects of PEDv
First-quarter 2014 pork production was 5.785 billion pounds, just slightly ahead of first quarter a year ago. While the effects of PEDv were apparent in the 2.6 percent year-over-year reduction in first-quarter commercial hog slaughter, sharply increased dressed weights, averaging 213.2 pounds per head, more than offset the reduction in the number of animals slaughtered, resulting in a 0.2 percent year-overyear production increase. Second-quarter pork production, forecast at almost 5.4 billion pounds, is expected to fall more than 2 percent below the same period last year. The expected reduction in second-quarter production reflects piglet losses from PEDv late last year. Second-quarter hog prices are expected to average $84- $86 per cwt, almost 30 percent above a year ago. For 2014, pork production is expected to be 22.7 billion pounds, 2.3 percent below 2013. Higher average dressed weights are expected to continue to limit production losses from reduced slaughter numbers this year.
First Quarter 2014 Exports Higher Than a Year Ago
March pork exports were more than 483 million pounds, almost 22 percent ahead of exports in March 2013. Exports were much stronger than expected, and may reflect foreign buying in anticipation of reduced summer pork supplies from PEDv. Total U.S. exports this year—forecast at 4.9 billion pounds— are expected to fall 2.8 percent below a year ago. The 10 largest foreign buyers of U.S. pork for both March and the first quarter of 2014 are listed below.
Sourec: USDA