US maintains solid pig meat demand in early March
Domestic stocks building ahead of 2011 levels
Through early March, production and most price data suggest that solid pig meat demand continues, even in the face of increases in hog slaughter and pig meat production in January and February, according to the U.S. Department of Agriculture.
Solid domestic pig meat demand is further reflected in quarterly disappearance estimates. USDA supply forecasts for the first quarter of 2012 point to a 2-percent increase in total pig meat supply. Accounting for estimates of first-quarter exports and ending stocks leaves total domestic pig meat disappearance 1.4 percent ahead of the first quarter of 2011. So far in the first quarter of 2012, U.S. consumers appear to be paying more for larger quantities of pig meat. First-quarter per capita pig meat disappearance is forecast at 11.5 pounds per capita, 0.49 percent larger than in 2011.
As a counterbalance to higher hog prices and indications of continued strong domestic pig meat demand, USDA data shows that pig meat stocks are building ahead of 2011 levels and that wholesale values of most pig meat cuts have traded at below 2011 levels since late January. Stocks of pig meat at the end of January were 584 million pounds. While significantly higher than in December 2011, the year-over-year increase in total pig meat stocks was about the same as in January 2011.
The February wholesale value of the pig meat carcass — $84.44 per cwt — was almost 5 percent below 2011 numbers. However, good availability of pig meat cuts and relatively low prices are expected to attract buyers’ attention, given that both beef and broiler production and domestic disappearance are expected to be year-over-year lower for most of 2012.