Sharp decline in the USA

According to U.S. Department of Agriculture (USDA) data, 11.08 million hogs were processed at commercial slaughter plants in October, down 932,000 head, or 7.8 percent, from the same month last year. Due to lower slaughter weights, pork production decreased even more, by 8.7 percent. From January to October 2021, 106.8 million hogs were hooked in the states so far; that represented a decline of 2.29 million head, or 2.1 percent. Pork production fell 2.2 percent to 10.37 million tons during that period. For now, there is no end in sight to this negative trend. For the year as a whole, the Washington Ministry most recently expected US pork production to fall by 2.2 per cent to 12.55 million tonnes. However, a decline in production of "only" 4.3 percent was assumed for the fourth quarter; however, this was almost twice as high in October. US pork production is also expected to decline in 2022, but only slightly. USDA analysts last estimated the decline from 2021 at 0.3 percent, which would leave production at 12.51 million tons. In addition to lower hog inventories, the department also cited labor shortages as a reason for the current decline in pork production. This is also reflected in stocks, which at 199,410 tonnes at the end of October were 1.7 per cent down on the same period last year. The managing director of the global breeding company Genesus, Jim Long, pointed out that the sharp rise in production costs had led to losses in pig fattening worldwide. This, he said, combined with the fall in prices, had led to significant economic losses, particularly in China and Europe, and to the destocking that had been underway in the US since early 2021. Now, he said, it looks like all three leading regions of global hog production will have fewer animals in 2022, which should lead to a noticeable increase in hog prices again. Long would not be surprised to see prices in the US move above US$1.20/lb (€2.34/kg), at least temporarily. Last Friday, the July future for lean hogs on the Chicago Mercantile Exchange (CME) was at 0.955 US dollars / lbs (1.87 euros / kg).