According to the USDA's March Livestock, Dairy and Poultry report, average prices for hogs and wholesale pork were greater than in the same period last year despite larger pork supplies in January-February. For the first 2 months of 2011, estimated commercial hog slaughter was nearly unchanged from a year earlier, and estimated commercial pork production was about 3 percent greater than in January-February 2010. However, prices of live equivalent 51-52 percent lean hogs averaged $58.59 for January-February, almost 19 percent greater than a year ago. Wholesale pork prices, averaged for January and February, were 22 percent greater than over the same period last year.

Such year-over-year price increases accompanying larger supplies can only occur when product demand increases. Among the factors that have likely driven increases in pork demand are higher incomes generated by recovering economies, higher domestic prices of csubstitute animal proteins—beef and poultry in this case—and a relatively low valued U.S. dollar exchange rate that mitigates higher U.S. pork prices for foreign consumers. As a result, hog and pork markets equilibrate at higher price levels, much to the benefit of the U.S. pork sector.