Thu, 15 Jun 2017
US - The Vice-President Pork Analysis with EMI Analytics says the higher volumes of pork being produced in the US will make access to export markets increasingly important, Bruce Cochrane reports.
High US slaughter hog numbers last fall stretched US pork processing capacity to the limited but, since the fall, slaughter hog numbers and processing capacity have been balanced.
Dr Steve Meyer, the Vice-President Pork Analysis with EMI Analytics, observes the US has had about three and a half percent more hogs to handle this year than last year but the opening of two new processing plants and the pending opening of two more processing plants have helped absorb those numbers and will provide the capacity to handle the anticipated four percent plus growth in numbers expected in the fourth quarter however the long term concern is with the sheer volume of product than will be produced.
I think it's going to make exports even more critical.
That's been really the thing that's helped the business this year.
We've been up 14.6 per cent on a carcass weight basis relative to the last year in the first third of the year.
It's been much better than what we thought it was going to be and now the dollar has weakened pretty substantially and, if we can keep the dollar weaker than it was last year, I think that's going to be very positive for exports and we're going to need it.
Over the next three years with those plants full with just one of them double shifted, we'll add about 10 percent to our slaughter capacity.
If we were to add that many hogs plus another three percent or so for weight, that's 13 per cent.
That's over four per cent per year.
That is a robust growth rate.
I think the highest we've ever had on per capita consumption here was 52.3 or 52.5.
That would out us at or above that kind of number with normal growth in exports so exports are critical to take a good portion of this growth over the next three years.
Dr Meyer says there is opportunity to grow exports but the caveat is what will happen in the renegotiation of the NAFTA and with bilateral discussions with former Trans-Pacific Partnership participants, particularly Japan.