Pork: Why production is falling in the USA

Why production is falling in the USA

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The greatest reduction in stock compared to June 2020 was in piglets up to 23 kg.
The greatest reduction in stock compared to June 2020 was in piglets up to 23 kg.

USA, Washington. For years, the industry in the United States knew only growth. Despite high producer prices, the trend is now reversing.

Pork stocks are shrinking not only in Germany, but also in the United States. According to the US Department of Agriculture (USDA), a total of 75.65 million pigs were kept in the United States as of June 1, 2021; that was 1.71 million head or 2.2% fewer than twelve months earlier. Quarterly surveys have been reporting year-over-year declines in animal numbers since as early as December 2020. Most recently, stock declines were seen in all weight categories.

In relative terms, the greatest reduction in numbers compared with June 2020 was in piglets up to 23 kg, where the number of animals fell by 2.9% to 21.74 million head. Runners up to 54 kg showed a decrease of 2.7% to 19.35 million head. The fattening pig herd was reduced by 1.5% to 28.60 million head. The decline in the number of sows kept was also in this range, down 96,000 head or 1.5% to 6.23 million head. The number of piglets raised per litter from December 2020 through May 2021 also remained below the same period last year, at 10.95, down 0.5%. USDA projects that just over three percent fewer sows will farrow from June through November 2021.

Despite the declining herd, USDA says hog slaughter from January through May was up 1.39 million head, or 2.6%, compared to the same period last year, and pork production was up as much as 3.2% to 5.31 mill. t. However, the Corona pandemic played a major role here. As a result, there were numerous slaughterhouse closures or capacity restrictions in the USA in April and May 2020 due to infected employees. Slaughterings slumped by more than 30% in some cases, affecting year-on-year comparisons. To some extent, this is also likely to apply to livestock census results due to the hog outbreak.

Export trends uncertain

For the year as a whole, the USDA most recently projected in its June forecast that pork production will decline 0.4% from 2020 levels to 12.88 million, which would be the first decline since 2014. While per capita domestic consumption is seen weaker due to high prices, exports are expected to increase 122,000 t, or 3.7%, to 3.43 mill. t. However, that may be too optimistic because of stalled sales in China, even for US suppliers.

According to the US Meat Export Organization (USMEF), US pork exports from January through April were 4.5% lower than the same period last year, totaling 1.05 mill. t. This included a one-fifth decline in sales of pork, including byproducts, in China to 313,250 t. High prices for slaughter pigs and pork also tend to suggest subdued demand from international customers. In May, according to the USDA, prices paid for slaughter pigs in some cases exceeded USD 1.20/lb; the equivalent of more than € 2.20 per kg of carcass weight (SG). For the year as a whole, the USDA expects an average price of USD 70.2/lb or € 1.30 per kilo SG; this would be 63% more than the average price of the previous year.

Source: fleischwirtschaft.de; AgE


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