“With production growing in most major exporting countries, declines in international pork prices will keep imports relatively competitive,” according to the Livestock & Poultry: World Markets & Trade report recently released by the United States Department of Agriculture (USDA). U.S. pork production is expected to increase in 2018 by four percent.
Genetics are making it easier for producers to farrow more piglets per litter, therefore, allowing them to meet the export demands. However, the advance in genetics is making it easier for producers at a global level, not just in the U.S.
Genetics may not be the only thing impacting production; the report explained that animal health and advances in veterinary care may also be attributing to sow production rate.
Production and exports outside of the U.S.
Individual countries’ ability to produce their own pork products may have a negative impact on U.S. exports. “Global production is forecast up nearly 2 percent in 2018 to 113.1 million tons,” the report said. China’s swine production is expected to show continued growth for the second year, due to this China’s expected imports are forecast to decline considerably, explained Lindsay Kuberka, agricultural economist with the USDA. Between 2013 and 2017 China had experienced a significant nine percent decline in sow numbers. The sow numbers are expected to grow dramatically as there are plans for growth by the beginning of 2018. All things considered, China is expected to remain the No. 1 importer. U.S. National Pork Board members are making attempts to better understand the Chinese market so that the U.S. will see continued success.
Production is expected to increase in Russia, the Philippines, and Mexico as well.
“The European Union will remain the largest exporter - unchanged at 2.8 million tons – but export growth is challenged by declining shipments to China and an appreciating euro,” the report explained.
Decline expected in 2018 hog prices
2016 was a good year for producers economically, as they experienced record hog prices that resulted in revenue of approximately 100 dollars per head. These prices may have impacted producers’ ability to advance their numbers.
In 2017 producers have struggled to break even. Now with growing numbers and competition from outside countries exports for the U.S. will depend on pricing and continue to make break even points a battle.
“The European Union, United States, and Canada will remain the principal suppliers, competing primarily on price. With relatively strong demand for processing, imports are unlikely to retreat to past levels,” Kuberka explained.
