Pig International - March 2012 - 5

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North American pig industry:
Cautiously optimistic

TALKINGPORK
> rabbott@wattnet.net

by Roger Abbott

Pig producers in North America have reason to look forward
in regard to prices and production costs.
Cautious optimism is
the watchphrase for
the pig industry across
North America as it
launches itself into
2012 and beyond. A
particular focus is on
driving the export trade
forward and improving pig welfare.
Two of the industry's leading
economists, Dr. Steve Meyer and Dr. Karl
Skold, both agree that the region's pig
producers have reason to look forward
to a positive future, especially with
regard to prices and cost of production.
And, as we report in this issue, one
British-based pig breeding company
is branching out into North America.

US, Canadian pig production
Speaking at the Banff Pork Seminar
in January, Dr. Skold, president of
Westside Economics, said: "Overall, the
fundamentals are promising and looking
more solid than they have in recent
years. We are seeing transitions in
markets that should benefit the U.S. pig
sector and Canadian pork production."
Overall, there wasn't much to
complain about, particularly for
a Canadian pig industry that had
struggled through four years of
extremely challenging conditions.
However, he did point out that caution
was called for in equal measure in
a world that is currently facing a
season of instability in the wake
of a global economic downturn.
Meanwhile, Dr. Meyer, a former
director of economics for the National
Pork Producers Council and the
Pork Board, and founder of Paragon

Economics, told Pig International
that he thought the current state of
the U.S. pork industry was good.
"While profits for 2011 were not
great, according to my data they
amounted to $4.92 per head in spite
of record-high feed costs," says Dr.
Meyer. "Break-even costs in 2012 are
forecast to be about $3/cwt carcass
lower based on current futures prices for
corn and soybean meal. A 1 to 2 percent
increase in supplies will push prices
somewhat lower, but futures suggest
profits of more than $10/head for 2012."

Pork exports increase
Asked about the opportunities ahead,
Dr. Meyer said he hoped pork would
be able to increase its market share
in the U.S., and that he
expected more activity
on the export market with
the signing of the Korean
Free Trade Agreement
and rising demand in
Asia, particularly China
and Hong Kong.
The main challenges
to this optimistic outlook
are the general economic conditions
and their impacts on demand at home
and abroad. Pig producers should
also be aware of moves to limit certain
technologies in the U.S., gestation
stalls being the most noteworthy,
as well as continued efforts to limit
the use of key antibiotics in animal
production and the entire animal
welfare culture and its impacts.
The U.S. Department of Agriculture
supports this cautious optimism about
the pig industry's growth in the U.S.,

with new estimates pointing to "small
increases in hog production in 2012."
It forecasts that the total U.S. pork
exports this year will be about 5.1 billion
pounds, roughly the same as in 2011.

North American pork outlook
The outlook for North America is
neatly summed up in the International
Meat Market Review, which stated:
"With further improvements in
productivity, the (U.S.) pig crop is
expected to rise, which will feed
through to a 2 percent increase
in slaughtering in 2012."
It adds: "With high pig prices
continuing to be available to
producers and feed costs remaining
relatively high, there is unlikely to

❱❱ Pig futures suggest
profits of more than
$10/head for 2012 ❰❰
be any further increase in average
carcase weights. This means that the
amount of pig meat produced will
also increase by about 2 percent."
As far as Canada is concerned,
the Review published that while the
country's pork production in 2012 is
expected to increase by about 1 percent
on 2011 levels, the cost of feed, as well
as some uncertainties in both pork
prices and foreign demand, is likely to
temper production growth during the
next 12 months.
PIGI

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Table of Contents for the Digital Edition of Pig International - March 2012

Contents
Pig International - March 2012 - Cover1
Pig International - March 2012 - Cover2
Pig International - March 2012 - Contents
Pig International - March 2012 - 2
Pig International - March 2012 - 3
Pig International - March 2012 - 5
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