Pork Producers Cautious Toward Expansion
Beef/Cattle: Drought-induced cow-herd liquidation has reduced average dressed weights and resulted in relatively more ground products but fewer middle cuts. Wheat pasture could be priced at a premium this winter. Cattle feeding margins remain negative despite higher fed cattle prices.
Special Article: Wholesale and Retail Price Changes in the Beef Sector
Beef/Cattle Trade: The United States is expected to maintain a widened net export margin into 2012 as growth in the U.S. beef export market continues, due primarily to a relatively weak U.S. dollar and increased global demand for U.S. beef. Despite a shrinking U.S. beef cattle herd, exports are expected to increase slightly above 2011 levels in 2012. Lower beef imports from Oceania continue to limit U.S. beef import totals.
Pork/Hogs: The September 1st Quarterly Hogs and Pigs report showed that the U.S. hog inventory was up 1 percent year-over-year. The breeding herd was shown to be up 0.6 percent year-over-year, and producer’s first farrowing intentions for December- February were 2.857 million, up 0.5 percent year-over-year, which perhaps indicates that the industry is cautious about any expansion plans. Pork production in 2011 is expected to be 22.6 billion pounds, 0.9 percent higher than 2010. 2012 commercial pork production is forecast to be 23.1 billion pounds. Fourth-quarter barrow and gilt prices are expected to average $60-$62 per cwt, while 2012 annual hog prices are forecast to average $62-$67, slightly lower than 2011. October WASDE revealed that corn and soybean ending stocks for 2011 and 2012 are estimated to be higher than expected, thus relieving some of the price pressure on feed in 2012 and allowing pork producers to have positive feeding margins in 2012. August pork exports were year-over-year 43.6 percent higher. Forecast pork exports in 2012 were revised down to 5,090 million pounds, still up 2.8-percent from projected 2011 export levels.
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