Fourth-quarter U.S. pork production has been elevated to 7.09 billion pounds, a 2.4% increase from the same period a year ago, while hog prices are expected to average $54 per hundredweight for the quarter, a 15% drop from Q4 2022. According to the Livestock, Dairy, and Poultry Outlook for December 2023, there are two factors driving fourth-quarter hog prices lower on the supply side: more hogs available and soft demand for pork cuts.

“Larger numbers of fourth-quarter slaughter-ready hogs derive from a 1% year-over-year larger March–May pig crop, and also from larger U.S. imports of Canadian slaughter hogs. This year during weeks 40–48 National Lean Base hog prices have averaged $55.82 per cwt, almost 15% lower than prices over the same period last year,” notes USDA ERS Agricultural Economist Mildred Haley and author of the report. “On the demand side, fourth-quarter wholesale pork cutout prices during weeks 40-48 averaged $88.41 per cwt, compared with $96.70 over the same period last year.”

However, the drop in the cutout has not been as harsh as the descent in hog prices, as processor margin is wider than a year ago.

With continued soft consumer pork demand and ample hog supplies expected, Q1 hog prices have been lowered $1 per cwt to $56 per cwt. For 2024, Haley notes prices should average $60 per cwt, 2.2% above the 2023 average.

October pork exports increased 5.7% year over year due to strong shipments to Western Hemisphere nations. Mexico alone accounted for 41% of U.S pork exports in October, a 16.1% jump from a year ago.

“Shipments to other important nations among the hemisphere nations included year-over-year increases to Canada (+0.6%), Colombia (+40.3%), the Dominican Republic (+13.2%), Honduras (+51.2%) and Guatemala (+33.1%),” Haley notes. “In total, Western Hemisphere nations accounted for 64% of U.S. exports in October.”

U.S. pork did lose some market share in Japan, with October exports almost 11% lower than a year ago. However, the European Union, with lower production and higher EU prices, has lost more market share. From January through October 2022, the EU accounted for 17% of Japan’s pork imports; for the same period in 2023 it was only 15%. Haley notes that it appears Canada and Brazil have now picked up some of that business.

U.S. pork exports for 2023 should round out around 6.75 billion pounds, a 6.4% increase over total shipments in 2022. Total exports for 2024 have been lowered by 100 million pounds, to 6.85 billion points, based on anticipated stagnant demand from major importing Asian countries.