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Q4 hog prices lowered due to weak demand, adequate supplies

2023 pork production is expected to be 27.2 billion pounds, about 1% above 2022.

Ann Hess

November 23, 2023

3 Min Read
National Pork Board

With year-over-year lower than average dressed weights on the horizon, the USDA’s Economic Research Service has lowered fourth-quarter pork production to 7.1 billion pounds. According to the Livestock, Dairy, and Poultry Outlook for November 2023, dressed weights through the first three quarters have averaged 2.4 pounds below those in 2022.

“Hog average dressed weights are likely to remain below year-earlier levels until the market signals consumer willingness—with higher prices—to compensate producers for the costs of putting additional weight on hogs,” notes USDA ERS Agricultural Economist Mildred Haley and author of the report.

While high interest rates, market uncertainty and regulations have impacted pork production regionally, the most problematic issue for producers nationwide has been weak domestic demand for pork. Because of that demand, producers have seen lower hog prices and break-even price levels for much of 2023.

“Thus far in 2023, monthly values of the wholesale pork carcass cutout have been below same month values of a year earlier. Through September 2023, the cutout value has averaged $90.76, almost 16% lower than the same-month average in 2022,” Haley reports.

In his latest National Hog Farmer market column, Steve Meyer points out while U.S. consumer demand for pork has been low the past two years, it is comparable to 2019-2020. “Real per capita expenditures for pork were still down 8.3% versus 2022 in September and year-to-date RPCE is still down 9% but the monthly gains since a disastrous July have been better than normal.”

Hog prices adjusted

Fourth-quarter hog prices have been reduced due to weak pork demand and adequate hog supplies. Prices are expected to average $55 per hundredweight, more than 13% below prices a year ago. Total 2023 pork production is expected to be 27.2 billion pounds, about 1% above 2022 production.

Haley anticipates improved pricing in the first half of 2024. “For the first half of 2024, prices are expected to average $57 per cwt in the first quarter—up 4% from first-quarter prices this year—and second-quarter hog prices are expected to average $63 per cwt, more than 11% higher than prices averaged in the second quarter this year. The hog price forecast for the third quarter of 2024 remains unchanged at $65 per cwt, more than 6 percent below third-quarter hog prices this year.”

Export opportunities

After a slow September, pork exports for the last quarter of 2023 are expected to be 10 million pounds lower, at 1.74 billion pounds, however 3.5% higher in volume than a year earlier. Total exports for 2023 are expected to come in at 6.7 billion pounds, 6% greater than 2022 figures.

High energy costs and industry regulations continue to make EU-exported pork less competitive in international markets. USDA expects EU pork production to drop 3.5% this year and about 1.6% next year. EU exports are expected to decline about 23% in 2023 compared to last year.

With those forecasts in mind, Haley has her eye on the following regions for purchases away from high-cost EU pork:

  • The U.S. share of Japan’s import market has declined slightly in 2022, while the EU’s share has decreased from 33.1 to 29.3%.

  • South Korea’s imports from the EU have dropped from 53.7% in 2022 to 42.7% this year. The U.S. share has increased from 26.4% to 31.7%.

  • In China, the EU’s 2023 share dropped to 47.8% for the first three quarters, compared to 53.10%  for the same period in 2022. Brazil picked up imports there, from 22.9% last year to 25.5% in 2023. The United States also picked up market share, with 8.3% in 2023 compared to 7.5% last year.

  • The Philippines has shifted much of its imports from the EU to Brazil.  Brazil now accounts for almost 28% of the Philippine’s pork imports. The United States moved up from 4.3% last year to 9.4% in 2023.

  • Australia’s imports in 2023 have transferred from the EU to the United States, with 39.8% of Australia’s January−September pork imports originating from the United States this year compared to 18.6% last year.

About the Author(s)

Ann Hess

Content Director, National Hog Farmer

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