Falling US pig meat consumption
The United States is the second largest pig meat market after China and per capita consumption has fallen back by 8% since 2009.
Inevitably both production and consumption developments in the US impact on the global pig meat market. Last year per capita disappearance, based on taking a supply balance of production and trade, declined to 21 kg retail weight with a tight supply situation and increased retail prices contributing to this development. Increasing pig meat exports, which account for over 20% of US production, and strong competition from poultry meat have exacerbated this development in recent years.
However, the latest United States Department of Agriculture forecasts for 2015 indicate a rebound in per capita consumption possibly by as much as 1 kg accompanied by expected lower retail prices compared with current levels. This is on the back of an expected recovery of 6% in domestic production after the decline of 1% in 2014. On the other hand consumption is still not expected to return to 2009 levels.
The overall average retail pork price has actually the year at 6% above that of a year earlier. The wholesale market though is already coming under pressure and so far this year the average price has already fallen by 17%. This reflects the increasing supply of finished pigs and the USDA is forecasting a reduction of up to 30% in the finished pig price for 2015 as a whole. The price could even be at its lowest level since 2010 putting considerable pressure on pig producers after the record year of 2014. A retail price adjustment is inevitable in order to clear the extra supplies even if retailers try to hold on to the margins on pork they achieved last year.