2009, Second Best Export Year
After increasing for 17 consecutive years, U.S. pork exports declined 11.6 percent during 2009. Still, last year’s export total was the second highest ever, more than 31 percent above 2007, which was the third highest year.
The drop in exports was due to China, which bought 285 million pounds less of U.S. pork in 2009 than in 2008. The top three destinations for U.S. pork last year were Japan, Mexico and Canada. USDA expects 2010 exports to exceed year-ago levels by 8 percent to 9 percent. Most major exporting countries have reduced their swine herds and world pork demand is expected to improve.
Pork imports into the United States last year increased only 0.2 percent; 81 percent of all U.S. pork imports came from Canada.
Canadian Herd Continues its Decline
For the Canadian swine breeding herd, 2010 started with a 4.3 percent decline from 2009 levels. That’s down 18.3 percent from the January 2005 peak. Canadians have cut their sow herd for 20 consecutive quarters. Statistics Canada predicts farrowings will be down 4.5 percent during the first quarter of 2010 and down 3.2 percent in the second quarter, compared to 2009.
The Canadian market-hog inventory was down 4.5 percent at the start of this year. The number of hogs shipped from Canada to the United States dropped 32 percent in 2009 and is expected to decline again in 2010. The Canadian swine herd has been shrinking because of red ink driven by low U.S. hog prices and a strong Canadian dollar.
Hog Prices Find Support
Last year was an odd one for hog prices. Despite a 2.5 percent decrease in U.S. slaughter, hog prices were 13.8 percent lower than in 2008. For the first time in more than 60 years, August was the low-price month. For the first time in 20 years, the high-price month was December.
Fortunately, 2009’s end-of-the-year price rally has continued into 2010. January’s average hog price was the highest for any month since September 2008. The high hog prices during first quarter 2010 are due to reduced slaughter (down 5 percent during the first seven weeks of 2010), lighter slaughter weights (down 0.5 percent) and improving demand, especially for exports.