Pig prices in the US reduce processors' profits

Since the beginning of the year, pork prices in the US market have steadily increased, but processors are seeing margins shrink as overseas demand has slumped in the past couple of months. China 's pork imports fell 14.8% in July from the same month last year, forcing processors to buy fewer pigs, lower slaughter rates and rely more on in-house supplies. These actions led to lower pork prices and supported both wholesale pork prices and processors' margins.

However, US prices remain too high to stimulate overseas demand. For example, U.S. fresh/frozen pork exports to the Chinese market fell by about a third in a year. In contrast, EU pork exports to the Chinese market increased by 20% compared to the first half of 2020.

“High prices and tariffs in China are expected to further undermine US competitiveness as Chinese demand for imported pork continues to fall. Therefore, US exports are expected to go to markets elsewhere in Asia,” said Duncan Wyatt, Lead Analyst at Red Meat, AHDB.

The USDA recently cut its forecast for total US pork exports for 2021 by 65,000 tons to 3.4 million tons. This is 1.8% less than in 2020. Export volumes are expected to decrease by 1.5% in 2022 compared to 2021.

And this fact will be taken into account when preparing the monthly analytical report Meatinfo.ru