Despite expanding pork production, strong domestic and international demand has kept pork inventories current, USDA’s Economic Research Service (ERS) said in its latest outlook report.
Though fourth-quarter pork production is on track to reach a record high of more than 7 billion pounds — up 3.5 percent from a year ago — the ending stocks-to-production ratio is projected to drop to its lowest level since 1990.
Domestic demand is outpacing production because U.S. consumers are likely responding to lower prices by buying more pork at a time when real disposable personal incomes are rising, ERS said in the November “
Livestock, Dairy and Poultry Outlook.”
“It is especially notable that so far, pork demand appears to be more than keeping pace with production increases. Evidence of robust demand for U.S pork — from both domestic and foreign consumers — is implicit in estimated pork ending stock volumes,” ERS economist Mildred Haley wrote in the report.
Prices slump
Fourth-quarter hog price forecasts reflect heavy supplies at $40- $42 per cwt, almost 9 percent lower than prices during the same period last year. For the full year, commercial pork production is projected at a record 26 billion pounds.
Pork ending stocks were down nearly 5 percent in September, the latest month for which data are available. Fourth-quarter ending stocks are expected to be 525 billion pounds, or about 7.5 percent of fourth-quarter pork production. The same ending stocks-to-production ratio is likely to be achieved in the fourth quarter of 2019, the agency said.
Pork exports finished the third quarter at 1.295 billion pounds, more than 5 percent above a year ago, ERS said. Mexico remains the largest foreign destination for U.S. pork, although shipments to Mexico fell 10.3 percent in September and 5.6 percent in the third quarter, compared with a year ago.
Source : Meatingplace