A U.S. based agricultural economist suggests Mexico, Russia and China will be the key markets to watch during 2010 as North American pork produces strive to improve the profitability of their farms.
During 2009, despite reduction in hog production, U.S. pork producers lost an estimated 25 dollars per hog marketed while the strong Canadian dollar made things even more difficult for Canadian producers.
University of Missouri agricultural economics professor Dr. Ron Plain observes the recession didn’t do anything good for hog prices but hopefully we’ll see an escalation of economic activity and consumer confidence returning which will be good for all meat prices.
Of course our domestic market here in the U.S. and for you in Canada what happens locally is the big factor.
Then of course exports are a very large part of what drives hog prices.
Our biggest foreign customer for U.S. pork is Japan and they are usually a pretty steady reliable source of purchases of our product.
Mexico is a market that’s fairly volatile in their purchases.
It looks like they’ve been picking up and expanding purchases here late in 2009, early this year.
Hopefully that will carry on through the year.
Also the Chinese market is one that bought a lot of U.S. pork in 2008, not so much in 2009.
The Russian market is also one that is quite volatile.
So probably the three that we’ll be watching here in the States will be Mexico, Russia and China because of the volatility of them.
Dr. Plain notes the quarterly inventory reports are showing fewer sows than a year ago.
He suggests those reductions will need to continue all the way through 2010 if producers are going to be able to enjoy profits in 2011.
Source: Farmscape.Ca
