Since mid-2017 returns have been relatively poor for hog producers, however one analyst says he expects the industry to continue to ramp up production in 2019.
“We are seeing inventory continue to build. Producers are optimistic in terms of their expansion plans,” says Shayle Shagam, USDA livestock analyst. “We have had several new plants open in the past couple years and there may be expectations that increased capacity will help support the price of hogs.”
Shagam told attendees last week at the USDA Agricultural Outlook Forum that the U.S. hog and pig inventory back in December was the largest in 75 years at 74.6 million head.
There will be about 3% more inventory available for slaughter this year than last and heavier weights are expected to increase pork production 4% in 2019.
However Shagam says the U.S. pork industry is looking at about a 7% decline in hog prices, which equates to a loss of over $3/cwt compared to 2018.
Shagam says the one good thing about the lower prices is the opportunity to expand pork export markets. He estimates pork exports could rise 6% this year to 6.3 billion pounds which Shagam says “would be a record in terms of our exports.”
“Price is helping move the product,” Shagam says.
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