U.S. meat production is going to be down this year, actually for the fifth year in a row. Pork supplies in particular are on pace to be the tightest since 1997.
Recent years of high feed costs and soft domestic demand has produced substantial red ink and reductions in the pork, beef and poultry sectors have finally taken hold. Meanwhile, 2011 exports will be on the rise. USDA is projecting a 9 percent increase in pork exports this year, which will take us back to 2008 record levels.
Even making small inroads in China’s pork market means big business for pork suppliers. The National Pork Producers Council met with the country’s trade representatives during the Chinese delegation’s recent trip to Washington, D.C.
Another market with tremendous potential is South Korea. After the extended wait for Congress to finally approve the U.S./South Korea Free-trade Agreement, the stage was set to grow that market significantly over time. Now, with South Korea’s growing foot-and-mouth disease dilemma, that timeline might shrink. An FMD outbreak is always an unfortunate development, and the Koreans have had to cull large numbers of cows and hogs. They will need to seek out suppliers to fill their strong consumer pork demand.
U.S. pork is still a bargain for its No. 1 (value) customer, Japan. Even though U.S. pork product prices have been on the rise and are projected to set records this year, when valued in Japanese yen, the prices are the lowest since 1996. That makes U.S. pork a valuable product.
Add this all up, and U.S. consumers will find significantly smaller supplies on display in the meat case. The questions then are will U.S. consumers balk, at what price level, to what degree and for how long? Having spent less than 9 percent of their disposable incomes on food for years, rising food prices on top of rising prices in other areas, as well as a long, slow economic recovery, could produce a restless consumer.
While pork exports are expected to grab a record 21 percent of this year’s production, the majority of our fate remains in domestic hands.
Here’s a look at some of the editorial scheduled for March 2011 Pork:
• Marketing the Finishing Pig: Thinking through facility design, sorting pens and other methods to reduce weight variability.
• Feeding the Nursery Pig for efficient Gains: Nutrient recommendations to keep those young pigs growing.
• Smart Thinking Column: Preparing finance strategies to ward off debt.
• Business Matters Column: Are you and your supervisors effective listeners, and why that’s important?
• Pork Exec, Inside View Column: U.S./So. Korea FTA and future export direction.