US pork exports look set to match or top last year’s record, with most sales going to China. That brisk export pace comes even as US hog supplies are contracting, driving prices sharply higher.
CBOT June 2021 lean hog futures are up 30% in 2021 and could rise further if China’s appetite for pork continues to outpace domestic production. Gro’s machine-learning-based China Pork Demand Forecast Model provides a leading indicator of pork demand and hence prices of hogs, grains, and oilseeds for the coming year. Gro’s model is able to predict Chinese pork demand nine months before the USDA PS&D initial estimate (the benchmark used by markets) and around two and a half years before the USDA releases a stable number.
Year-to-date commitments of US pork to all destinations are 840,507 tonnes, in line with 2020’s record exports of 1.9 million tonnes, and possibly on track to exceed them. China accounted for nearly half of US pork exports in 2020, and 30% of pork exports so far in 2021.
Surging US pork exports come at a time when the US hog supply is contracting. Inventory of all hogs and pigs stood at 74.8 million head as of March 1, down 3.3% from the previous quarter and 2% below year-ago levels. Inventories of market hogs (animals raised for slaughter) as well as the breeding herd size and spring and summer farrowing intentions also declined, according to the USDA March Hogs and Pigs report. The data suggests smaller slaughter numbers starting in Q4 2021 all the way through Q1 2023.
China continues to see occasional flare-ups of African swine fever, which decimated the hog herd in 2019, indicating that hog supplies haven’t entirely recovered. Meanwhile, domestic pork demand has recovered after being jolted by the COVID pandemic last year.
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