Pork Profit Maximizer – Retail Edition
USDA adjustments to 2018 pork production were relatively minor. Q2 production growth was revised down to 4.3% compared to a 4.7% increase forecast in April. Lower weights likely contributed to this adjustment. No changes were made to pork production forecasts for the second half of the year and USDA expects total US pork production in 2018 to be 26.784 billion pounds, 4.6% higher than a year ago. Despite the current ongoing trade disputes with China, USDA did not make any significant changes to its pork export forecast.
Pork exports in 2018 are expected to be 5.916 billion pounds, 5% higher than a year ago. Net pork trade in 2018 is expected to increase by 300 million pounds vs. last year. Since total production is expected to increase by 1.186 billion pounds, this leaves 885 million pounds to be absorbed by the domestic market. The current weakness in pork prices may be surprising until you look at the 3.5% jump in per capita consumption in 2018 (see chart).
Pork production is forecast to increase another 840 million pounds next year (+3.1%) and 652 million of that supply is expected to go into domestic channels. Keeping export channels open is imperative for pork.