Slower breeding inventory growth and lower producer farrowing intentions suggest a moderated pace of pork production growth late in 2020, according to the U.S. Department of Agriculture latest “Livestock, Dairy, and Poultry Outlook.” Further, pork production is also expected to be impacted by effects of COVID-19.
These effects, USDA economist Mildred Haley relayed, are likely to be felt particularly in the second quarter as the processing sector adjusts to the impacts of COVID-19 on its operations. Consequently, processor adjustments to slaughter schedules are expected to slow the rate of hog slaughter, and subsequently, pork production.
“As some processors’ hog slaughter schedules are disrupted, some postponed animal slaughter is expected to be rolled forward to succeeding quarters,” Haley said.
As such, USDA revised quarterly forecasts of 2020 pork production. Second-quarter pork production is expected to be almost 6.7 billion pounds, about 1% above year-ago production levels. Third-quarter pork production is forecast at about 7.3 billion pounds, an 8% increase from a year earlier. Production in fourth quarter should approach 7.7 billion pounds, almost 4% higher than a year ago. For the year, anticipated pork production is forecast at just over 29 billion pounds, more than 5% higher than production in 2019.
Hog prices from the second quarter through the end of 2020 are expected to reflect large animal numbers combined with the impacts of COVID-19 on pork demand. Second-quarter prices of live equivalent 51-52 percent lean hogs are expected to average $41/cwt, 29% below prices a year ago. Third-quarter prices are forecast at $42/cwt., about 16% below the same period in 2019. Fourth-quarter hog prices are likely to average $35/cwt, almost 19% below the same period last year. For 2020, quarterly price forecasts average $40.13/cwt, more than 16% below average prices in 2019.
Despite domestic setbacks and ongoing global challenges relating to COVID-19, pork exports are expected to be a bright spot. USDA’s revised forecasts for Q1 exports is 2 billion lb., up 38% year over year. Exports in Q2 are forecast at 1.65 billion lb., 125 million lb. less than last month’s forecast but still almost 8% above a year ago. Third-quarter exports are forecast at 1.7 billion lb., reduced by 100 million lb. from last month but more than 12% ahead of same period of 2019. Fourth-quarter exports are expected to come in at about 2.125 billion lb., 150 million lb. below last month’s forecast but more than 16% higher than a year ago. These quarterly forecasts total 7.475 billion lb. for 2020, more than 18% higher than total pork exports in 2019.