The USDA’s Foreign Agricultural Service reported in an annual report that China’s 2023 imports of breeding swine and pork were expected to decline to 5,000 head and 1.85 million tonnes, respectively. Lower domestic hog and pork price were cited for the forecast decline in imports.
Consumer price sensitivity and competition among producers were expected to constrain pork and hog price increases, squeezing margins, the FAS report said. Strong carryover stocks of beef cattle into 2023 were expected to support an increase in cattle and beef production to 52.575 million head and 7.4 million tonnes, respectively.
Cattle and beef imports were forecast to decline to 300,000 head and 2.5 million tonnes, respectively, in 2023 on a less optimistic economic outlook, COVID restrictions and uncertainty in the Hotel, Restaurant and Institution sector and tight global supplies.
SWINE PRODUCTION AND IMPORTS
Swine production in 2023 was expected to reach 675 million head, the report said. The collapse of hog and pork prices in 2021 and the first half of 2022 caused severe losses, especially for large producers with significant investments.
However, large producers remained steadfast even as losses mounted and were expected to meet production targets in 2023 to maintain market share, the FAS said. Midsized producers were expected to expand production in 2023 on steady hog and pork prices.
Imports of live breeding swine in 2023 were estimated at 5,000 head, the FAS said.
Imports could be pressured by lower hog and pork prices in 2023, the report said. Additionally, higher transportation costs for breeding swine, stringent import quarantine and testing requirements and ongoing COVID restrictions for airline crew entering China were expected to weigh on imports.
PORK PRODUCTION AND IMPORTS
Pork production in 2023 was expected to grow and reach 52 million tonnes, less than pre-African Swine Fever levels but in line with consumer demand and a less optimistic economic outlook, the USDA said.
High feed costs were expected to lower average live hog weights in 2023, the FAS said. The practice of “second fattening” (where standard weight hogs are retained for additional fattening by intermediary producers) was expected to have a minimal effect on overall pork production in 2023.
Pork imports next year were forecast at 1.85 million tonnes, an 8% decline from the revised estimate for 2022, the USDA said. The import estimate for 2022 also was lowered by more than half from the previous estimate published in the FAS China semi-annual report.
Pork imports in 2023 were expected to decline from strong levels witnessed in the last few years as domestic production and prices stabilize, the report said. Additionally, imports were expected to be constrained as global pork prices are less competitive than domestic prices.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $141.72 to $144.73 per cwt, compared with last week’s range of $141.00 to $150.00. FOB dressed steers, and heifers went for $221.34 to $224.93 per cwt, versus $223.30 to $228.00.
The USDA choice cutout Tuesday was down $2.28 per cwt at $256.66 while select was up $2.18 at $233.58. The choice/select spread narrowed to $23.08 from $23.18 with 120 loads of fabricated product and 53 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $2.65 to $2.75 a bushel over the Dec futures and for southwest Kansas were steady at $0.85 over Dec, which settled at $6.92 3/4, down $0.03 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $180.06 per cwt down $0.85. This compares with Tuesday’s Sep contract settlement of $179.45, down $2.07.