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Stay optimistic as we move towards spring

Exports remain a good story; daily slaughter numbers have remained strong.

February 15, 2023

2 Min Read
Stay optimistic as we move towards spring
National Pork Board

As I sit here on this February morning I am starting to see signs of winter fatiguing. The sun is out and is getting stronger each day, which is a good thing because we have had over 50 inches of snowfall this winter in southern Minnesota and March hasn't even hit yet. It's hard to know what is coming next – ­40 plus degrees or another snowstorm on the horizon. Today I am optimistic, not just for the weather, but also as I look forward to what may happen in the pork industry.

Limited domestic growth on the horizon
As I've spoken folks through pork congress season, it does not appear that there is any sort of significant growth planned in the United States in the short run. I didn't say no growth, I said no significant growth. There are always producers who have strategic projects or have farms that are getting to the point where they have items that need to be addressed. Based on discussions with builders and producers there just isn't a lot of interest in any sort of meaningful expansion at this point. Blame cost of production, building costs, interest rates and forward pricing opportunities.

Exports remain a good story
Some export reports came out last week and indicated a good December with the United States exporting 5% more pork in December 2022 versus the prior year. Year over year exports were down about approximately 10%, but this is not a great current indicator, as early in 2022 exports were at a much lower pace. Mexico remains at the top of the pack and continues to be an important market for the United States. Overall pork variety meat exports also continue to grow and ended up at a record value for year ended 2022. As the United States continues to have some success opening up new markets, diversification of export market opportunities should be a good thing long-term.

Daily slaughter numbers have remained strong
The last few week's reports show 2.68MM, 2.53MM, 2.54MM and 2.57MM head respectively. Then on Friday we finally moved below the 2.5MM head mark with a revised report indicating 2.48MM head slaughtered last week. It also appears that producer-owned weights have been on the decline. Both of these items may indicate that we are more current after working through some of the missed days due to holidays and weather issues of winter. Cutout and cash prices have remained choppy but with the potential of less pork available moving forward via fewer head available and lighter weights I am hopeful we will see the beginning of a seasonal rally.

Nobody knows for sure where to from here. But based upon some of the above themes, I have reason to remain optimistic. Continue to focus on the things you can control and have the most impact on. There will be brighter days on the horizon.

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