More hogs are coming in 2008, according to USDA's December Hogs & Pigs Report, as numbers in all categories showed more hogs on the ground and more hogs planned in terms of farrowings.
"We're looking at a wall of meat coming (in 2008)," says Len Steiner, president Steiner Consulting Group, in response to USDA's December pig crop report. "But I don't just mean pork; it's beef and poultry too." However, he says the good news is that it's not going into cold storage. We saw it already this fall, and "December has been a big shipping month for exports," he adds.
"We've taught a lot of people to eat U.S. pork," says Steiner. "Meat consumption is good here and overseas and that's very helpful."
Indeed, without exports, profits would have disappeared long ago for U.S. pork producers. While expanding markets and convincing customers to try and to buy U.S. pork has played a significant role in the industry's ability to expand exports for 15 or more consecutive years, the U.S. dollar's decline also is significant.
"The U.S. dollar's decline has helped tremendously with pork exports, compared to other countries," notes Steiner. "The United States is a cheap place to shop."
Victor Aideyan, senior risk management consultant with, points to China's agreement with Smithfield to purchase product from October through the end of 2007. "In October alone, China imported 37.7 million pounds-- that's a bit more than half of its commitment," he notes. "I think there will be more sales coming."
It's increasingly clear that without a robust export market U.S. hog prices would be much lower, and it would have occurred much sooner.
The fact that USDA's December report reflects more record-setting production is on pace for 2008, along with the agency's recent reporting track record of underestimating production, the U.S. pork market will continue to a bargain for global shoppers. That's a good thing, because if the pork has to stay home, producers are in for a serious run of hard times.