Increased US pigmeat production anticipated
The latest USDA red meat outlook points to increased pork production in the first quarter of this year, in line with higher than expected hog slaughter numbers in January and early February, according to Donagh Hennessy of Bord Bia.
He said current forecasts for the first quarter of 2015 are pointing towards a 6% rise in output relative to the same period last year. However, he also said it is worth remembering that in early 2014 the US industry was battling Porcine Epidemic Diarrhea (PEDv).
Hennessy said that it is anticipated that higher hog numbers will put pressure on prices with forecasts for the first quarter suggesting a drop of around 25% on 2014 levels.
This pressure, he said is anticipated to continue throughout the year, as accelerating production of competing proteins, in particular broiler and other poultry production, along with a slowdown in pork exports, is likely to impact on hog prices.
According to Hennessy, US pork exports are expected to decline by around 1% to 4.82 billion pounds in 2015.
This continues the decline seen in 2014, where US exports were down by 2.7%, with trade in the last quarter of 2014 almost 15% lower, he said.
Hennessy said exports declined last year due to two major factors: PEDv-reduced supplies and the US dollar exchange rate.
The main export markets were Mexico and Japan, which combined accounted for around 55% of exports, he said.
Other main markets included Canada, China and South Korea.
Hennessy said that currently, shipments of US pork to Asia are constrained by problems at US West Coast port facilities, while a longer term factor likely to slow exports is the high value exchange rate of the US dollar making US product less competitive.