The US may have entered a period of structurally lower pork demand from other countries, according to the Illinois Farm Policy News quoting Financial Times Writer Hudson Lockett in an article earlier this month.
There were years when pork prices were high and people switched to beef, chicken or fish, said Darin Friedrichs, analyst at Shanghai-based StoneX, in the FT story.
“It definitely seems like we’ve reached peak pork in terms of China’s consumption,” Friedrichs was quoted as saying.
JULY PORK EXPORTS STUMBLE
In its monthly Livestock, Dairy, and Poultry Outlook report this month, the USDA’s Economic Research Service stated that, “Pork exports in July were 508 million pounds, 8.5% lower than those of a year ago. Higher exports to most major markets were unable to offset significantly lower shipments to China\Hong Kong,” the ERS said. “Canada was the only other major market to which shipments were lower in July.”
The ERS report said, “(Pork) exports were 1.8% lower than a year ago through the end of July, and down 46% to China.”
This month’s update added that, “Second-half pork exports are reduced to reflect expectations of continued lower shipments to China\Hong Kong.”
“Total exports for 2021 are expected to be 7.334 billion pounds, almost 1% greater than exports in 2020,” the Outlook report said.
The September USDA’s World Agricultural Supply and Demand Estimates report stated that, “The pork export forecast for 2021 is reduced on recent trade data and expected slower demand growth from Asia; no change is made to the 2022 forecast.”
More narrowly, the Illinois Farm Policy News said Bloomberg writers Michael Hirtzer and Domic Carey reported last week that, “Massive hog culling in the Dominican Republic after the outbreak of a deadly swine disease has led the country to stock up on US pork.
“(US) exporters last week sold a record amount of the meat to the island nation, US Department of Agriculture data showed Thursday. That’s after African swine fever was detected in hogs there in late July, in the first outbreak in the Americas in four decades.”
EU PORK EXPORTS
With respect to pork exports from the EU, USDA’s Foreign Agricultural Service indicated in a recent report that, “During the first half of 2021, EU pork exports rose 14% — with increased exports to China (+173,000 Tonnes), the Philippines (+82,000), Vietnam (+35,000) and Chile (+28,000).”
However, the report also said, “FAS/Beijing forecasts Chinese pork imports to decline by 528,000 MT in 2021 when compared to 2020.”
FAS said, roughly 60% of Chinese pork imports are of EU origin, implying a reduction of more than 300,000 tonnes of EU exports.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $124.48 to $125.06 per cwt, compared with last week’s range of $123.98 to $126.80. FOB dressed steers and heifers went for $194.31 to $196.10 per cwt, versus $194.02 to $198.29.
The USDA choice cutout Tuesday was down $1.14 per cwt at $301.56, while select was off $0.03 at $274.35. The choice/select spread narrowed to $27.21 from $28.32 with 121 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.65 to $1.85 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.32 1/2 a bushel, down $0.07.
The CME Feeder Cattle Index for the seven days ended Monday was $154.81 per cwt down $0.06. This compares with Tuesday’s Sep contract settlement of $154.40 per cwt, up $0.15 and the Oct settlement of $156.12, up $1.35.