USDA estimate for US pork market (as of Sept. 12, 2013)
The US Department of Agriculture (USDA) expects a seasonal increase in pork production in the USA in the fourth quarter of 2013. Normally, both slaughter numbers and slaughter weights increase compared to typical summer production with reduced daily gains due to high temperatures.
The forecast for meat production is above the level of the same period last year. This is also assumed for the first two quarters of 2014.
Pig prices converted to € per kg are expected to fall at the end of September 2013 for the following winter period and, assuming a constant exchange rate of $ 1.32 per €, fall below the € 1.40 per kg mark.
The USDA is not assuming that most of the increase in production can be exported, but will have to be sold on the domestic market at falling prices. However, the low domestic price level will rub off on export prices, with the result that the world's leading US exports will set the tone for the price level on the global markets.
The competition problem will not have a direct effect on the EU, as the EU's main exports go to Russia, whose market is closed to the USA due to the ractopamine problem. However, indirect effects via other competitors in the pork export business, such as Canada and Brazil, will also have a noticeable impact on European sales.
The European dependence on the export business means that, despite different developments in the individual production areas, a mutual influence on a basic pig price level is unavoidable. This often does not happen in a 1:1 translation, but with temporal shifts and distortions. Under the current circumstances, pig prices of €2 per kg remain a distant prospect for the time being.
