Mexico, Russia and China will be key markets to watch during 2010, says Ron Plain, University of Missouri agricultural economist.
During 2009, despite reduction in hog production, U.S. pork producers lost an estimated $25 per hog marketed. Losses were even sharper for Canadian producers.
Plain says hopefully we'll see an escalation of economic activity and consumer confidence returning which will be good for all meat prices. “Of course exports are a very large part of what drives hog prices,” says Plain. “Our biggest foreign customer for U.S. pork is Japan and they are usually a pretty steady reliable source of purchases of our product.”
“Mexico is a market that's fairly volatile in their purchases,” Plain continued. “It looks like they've been picking up and expanding purchases here late in 2009 and early this year. Hopefully that will carry on through the year.”
“The Chinese market is one that bought a lot of U.S. pork in 2008, not so much in 2009. The Russian market is also one that is quite volatile,” says Plain. “So probably the three that we'll be watching will be Mexico, Russia and China because of the volatility.”
Plain notes the quarterly inventory reports are showing fewer sows than a year ago. He suggests those reductions will need to continue through 2010 if producers are going to be able to enjoy profits in 2011.
Source: Farm Scape