Where is the US pig market sitting after COVID-19 disruptions?
Spork processing capacity utilization still reduced following COVID-19-related disruptions, sow and boar slaughter up from last year,April exports strong.
U.S. pork processing capacity utilization increasing as COVID-19-related disruptions recede
Starting on April 6 with the temporary closure of a major plant in Iowa, virus-related laborforce absences have caused a succession of plant slowdowns and temporary closures. However, USDA, Agricultural Marketing Service data show that since April 29─when capacity utilization bottomed-out at 53.9 percent with estimated federally inspected pork production of 60 million pounds— capacity utilization has averaged 76.4 percent, with daily pork production averaging almost 84 million pounds. For the week ending June 12, capacity utilization averaged 76.4 percent, with estimated federally inspected pork production of almost 84 million pounds.
Lower capacity utilization in pork processing plants is slowing second-quarter pork production. After declining almost 11 percent on a weekly basis in April, estimated federally inspected pork production in May was about 1.8 billion pounds, about 9 percent below a year earlier, on a weekly basis adjusted for 2 less slaughter days this year. For the second quarter, USDA is forecasting commercial pork production at about 6.2 billion pounds, almost 7 percent below the same period last year.
Hog prices are likely to continue to lag processing industry recovery rates, reflecting backups of slaughter-ready animals on hog farms. Second-quarter prices of live equivalent 51-52 percent hogs are expected to average $40 per cwt, 31 percent below year-earlier prices.
Breeding animal slaughter increasing in 2020
Changes in sow and boar slaughter are often indicators of future directions in pork production, particularly when slaughter increases. Extended increases in sow and boar slaughter signal decreases in the pork production base and can indicate future decreases in pork production. The figure below shows that sow and boar slaughter in 2020 has largely exceeded year-ago slaughter numbers since the beginning of the year.
In the first 22 weeks of 2020 (between the week ending January 4 and the week ending May 30), sow and boar slaughter averaged almost 62,000 head per week, more than 10 percent above the same period a year ago. Since the week ending April 11, when COVID-19-induced interruptions in the processing sector began to occur, sow and boar slaughter accelerated. Between the week ending April 11 (week 15) and May 30 (week 22), slaughter of breeding animals averaged about 63,000 head per week, almost 15 percent above the 54,800-head average for the same period in 2019.
April exports strong despite COVID-19-related disruptions
U.S. pork exports in April were over 641 million pounds, more than 22 percent ahead of those in April 2019. ChinaHong Kong was by far the largest buyer of U.S. pork in April. Shipments to ChinaHong Kong totaled 237 million pounds, more than four times larger than year-earlier volumes.
It is notable that U.S. pork exports to Japan in April—122 million pounds, 30 percent higher than a year ago—were the largest since April 2015. Japanese Government import data for the first 4 months of 2020 show that imports of U.S. pork increased more than 22.3 percent, while those from the EU declined by 21.5 percent.
June 17, 2020/ USDA/ United States.
https://www.ers.usda.gov/
Source:https://pig333.com/latest_swine_news/where-is-the-us-pig-market-sitting-after-covid-19-disruptions_16301/