Source: Lisa M. Keefe, MEATINGPLACE, 11/22/16



The best is yet to come for U.S. pork producers, say industry analysts, with record production levels and new fabrication capacity on the way, and despite chilly winds blowing on the export side due to recent political rhetoric.

The National Pork Board and the pork checkoff hosted a conference call for media parsing the most recent numbers related to the industry and offering opinions on near-future prospects for producers and processors.

On the basis of October and early November slaughter data, the forecast for fourth-quarter commercial pork production just under 6.7 billion pounds, a record level that is 3 percent higher than a year ago, according to USDA’s Economic Research Service’s “Livestock, Dairy and Poultry Outlook” report.

Although the abundance of pork has depressed prices for both the live animals and the finished products, Len Steiner, president of Steiner Consulting Group in Manchester, N.H., noted that the U.S. economy is growing, “and that’s generally good for meat demand.

“The stock market is at all-time record highs, and consumer confidence remained good (during a divisive presidential campaign) and now that the election is over, we think consumer confidence will increase,” he said.

Lower feed prices also bode well for higher meat production.

While per-capita disappearance of pork has been about flat since 1982, Steiner noted that per-capita disappearance for the four major species is expected to wind up 2016 5 percent higher year-over-year, and then increase again in 2017 and 2018.
Exports are key, however, as more than 20 percent of the pork produced in the U.S. goes to export markets.

Exports
Globally, the U.S. is the No. 2 exporter of pork behind the EU bloc, said Brett Stuart, CEO of Global AgriTrends in Denver.
Mexico, Japan and Korea are top pork export destinations, but unlike beef, pork does not face competition from closer sources — as beef does with Australia, which has a free trade agreement in place with Japan — and the U.S. also is able to export some types of chilled pork to Asia that the EU cannot, which is a “huge benefit,” Stuart said.

Dim prospects for the Trans-Pacific Partnership free trade agreement and strong rhetoric during the campaign of President-elect Donald J. Trump is not as threatening to pork exports — and ag exports in general — as it might appear, Stuart said.

“There has been a lot of concern [but] everything’s speculation at this point,” he said. “[Trump] has been very aggressive about trying to build jobs at home. … It’s hard to believe that he would be trying to change trade in a way that would negatively affect a huge manufacturing base in ag.”

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