FORT COLLINS, Colo. (Reuters) – China’s pork imports should surge to an all-time high in 2020 after African swine fever decimated its hog herd, and the United States is ready to take on the task as it also eyes a new export record.
The United States closed out last year with the largest-ever year-end inventory of frozen pork, some 15% more than at the end of 2018, according to data published Wednesday by the U.S. Department of Agriculture. The stockpile of 581 million pounds was up 5% on the previous end-of-December high notched back in 2008.
Frozen U.S. pork supplies also set monthly highs in October and November, and that data dates back to 1917. Prior to October, a new monthly record had not been set since January 2016.
U.S. hog producers increased animal inventory over the previous year during every quarter in 2019 by an average of 4%. Those numbers were all record-high except for the Dec. 1 count, which has a much longer period of record. The population of all hogs and pigs on Dec. 1 was 77.3 million head, second only to 1943.
April lean hog futures traded on the Chicago Mercantile Exchange hit two-week highs on Thursday, finishing at 75.35 cents per pound. That is 16% higher than a year ago, which was an 11-year low for the date, but the severity of African swine fever in China was not evident to the market until March 2019.
After that revelation, hog futures were generally elevated for much of last year when compared with other recent years, though some market bulls felt that prices were still not high enough to truly reflect the huge global pork deficit that would be caused by China’s hog deaths. But so far, the U.S. herd and production rate has been increasing sufficiently to meet projected rise in demand.
CHINESE IMPORT BOOM
Data published by China’s General Administration of Customs on Thursday shows the country’s total 2019 pork imports hit 2.11 million tonnes, some 75% more than a year earlier. Although the United States is not China’s primary supplier, U.S. pork shipments to the Asian country easily soared to a new record last year, with particularly large volumes in the second half.
Through November, U.S. pork exports to China had reached 472,811 tonnes, some 42% more than the previous high for the period set in 2016. The boost in business makes a substantial difference to U.S. suppliers, but just to put this in context with China’s demand, last year’s U.S. pork imports accounted for only 1% of China’s total annual consumption.
USDA estimates that China consumed 48.97 million tonnes of pork in 2019, which was a 10-year low and down sharply from the prior year.
In the first 11 months of 2019, the value of U.S. pork exports to China totaled $1.04 billion, well beyond the previous full-year high of $714 million set in 2011.
Read full article Share on twitter