Pigs in a building

Pork Demand Stays Strong in First Half of 2013

The total first half 2013 commercial slaughter at 54.651 million head vs. 54.765 million head last year or 114,000 head lower, is reflected in higher average first-half hog prices and also stronger year-over-year demand for pork products, says the Livestock, Dairy and Poultry Outlook published today by USDA’s Economic Research Service (ERS).

Average first half 2013 prices of 51-52% live equivalent hogs were $62.25/cwt., nearly 1% greater than average prices in the same period a year ago, the ERS report indicates.

However, higher first-half 2013 live hog prices weren’t enough to offset higher feed costs, and therefore most hog producers experienced negative returns in the first six months of this year. Iowa State University calculated hog losses averaged $21.67/head due to first half 2013 corn prices, which averaged about 11.4% higher than a year ago. Soybean prices averaged more than 20% higher than average prices for the first half of 2012.

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First-half commercial pork production was slightly less than 1% below the same period of 2012, due to one less slaughter day and slightly lower average dressed weights. Pork exports fell almost 11% below first-half 2012 numbers.

Lower exports combined with slightly higher pork imports meant a larger quantity of pork for domestic consumption. Based on almost 5% less pork stocks recorded at the end of June, disappearance in the first half of 2013 was almost 4% greater than in the same period last year, the ERS report said.

Normally, larger domestic pork supplies result in lower prices across the pork supply chain. That didn’t hold true in the first half of 2013, as prices of both live hogs and retail pork were slightly higher year over year. Consumers paid slightly higher retail pork prices even though greater supplies were available compared to the same period in 2012.

Read the full report at www.usda.gov. under Agency Reports.

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