US pork imports were only 0.6% below last year in the January-July period, according to the USDA’s Livestock, Dairy, and Poultry Outlook report Monday. Canada has been the primary supplier.
US pork exports slowed in July, mostly because of slower exports to China, whose pork sector was rebounding from recent downsizing.
MORE SLAUGHTER CAPACITY TO EASE BOTTLENECK
Expanded slaughter capacity in two Corn Belt states was expected to reduce pressure on fourth-quarter hog prices by easing the flow of hogs through a seasonal high-slaughter period, the Outlook report said.
Commercial pork production for the third and fourth quarters were expected to be record high. Third-quarter production was forecast at 6.3 billion pounds, 2.8% above a year earlier. Fourth-quarter production was expected to be 7 billion pounds, 5.7% above last year.
Two large new slaughter plants that each opened on Sep. 5, will reduce the probability that large anticipated hog numbers will exceed US slaughter capacity and significantly pressure US hog prices, the Outlook report said.
The Clemens Food Group plant in Coldwater Mich., has a single-shift capacity of about 10,000 head per day. The Triumph-Seaboard Foods plant in Sioux City, Iowa, has a single-shift capacity of about 12,000 head a day.
While it is unlikely that either plant will reach full single-shift capacity immediately, increasing slaughter rates were thought likely to be adequate to alleviate the significant effect on hog prices that anticipated large fourth-quarter weekly hog slaughters might otherwise bring, the USDA said.
Prices for live equivalent 51% to 52% lean hogs were expected to average $57 to $58 in the third quarter, about 17% higher than a year ago, the report said. Fourth-quarter prices were expected to be $44 to $46, almost 22% above a year ago, the Outlook report said.
Strong hog price expectations signal continued solid domestic and foreign pork demand, the USDA said. The wholesale belly price — a reflection of much of the domestic demand strength in 2017 — was 44% below their late-July peak in the first week of September, but were still 42% above the same week in 2016.
AUGUST PORK EXPORTS DRIFT LOWER
August US pork exports were 390 million pounds, a volume almost 4% lower than a year ago, the USDA said. The decline was attributable primarily to 53% lower shipments to China/Hong Kong.
Pork export volumes to Mexico in July were placed at 129 million pounds, up 10.4% from last year’s 117 million, the US said. However, shipments to Japan, at 88 million pounds were down 11.0% from 99 million last year in July. And shipments to South Korea amounted to 45 million pounds, up 1.4% from 44 million in the year-earlier period.
China’s pork import data for July shows a 52% decline from a year earlier, a dramatic decline, but China continues to import pork at a historically high level, and the apparent long-term trend is upward, the report said.
CATTLE, BEEF RECAP
Only one lot of cattle sold last Wednesday on the Livestock Exchange video auction at $104.75 per cwt.
Cash trade was reported Friday at $104 to mostly $105 per cwt on a live basis, steady to down $1 from the previous week, and at mostly $165 to $166 on a dressed basis, steady to down $1.
The USDA’s choice cutout Tuesday was down $0.51 per cwt at $192.11, while select was up $1.13 at $188.83. The choice/select spread narrowed to $3.28 from $4.92 with 108 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday was $150.47 per cwt, up $0.38. This compares with Tuesday’s Sep settlement of $151.57, up $0.77.