According to Purdue University Extension economist Chris Hurt, much cheaper feed has led the pork industry to begin an expansion that is expected to continue throughout this year.
This current expansion means that pork supplies will begin to grow more rapidly in the last half of 2014. Feed prices are expected to remain moderate with corn prices only increasing seasonally into the summer and then dropping again with a normal 2014 harvest. Soybean meal prices should move downward for most of the year as South American supplies come to market in the late-winter and spring, and then as larger U.S. soybean acreage continues to put downward pressure on meal prices through the fall.
Estimating 2014 pork supply
USDA reports the current number of market hogs to be down fractionally, but weights are expected to run about 2% higher and result in a 1% to 2% increase in pork production for the first half of 2014.
"Farrowing intentions for this winter and coming spring are up 1% to 2%," Hurt says. "With pigs per litter about 1.5% higher and higher weights, pork production in the last half of 2014 will be up nearly 4%. Pork production is likely to continue to expand into 2015."
Hurt says that while farrowing intentions are up, USDA's estimate of the breeding herd was down by 62,000 head, or 1%. The declines were led by Western Corn Belt states of Iowa (-30,000 head), Minnesota (-10,000) and Missouri (-5,000). A possible explanation for why pork producers were not as optimistic in those areas is reduced corn yields in those states. Most states east of the Mississippi had record corn yields in 2013.
"Pork demand in 2014 should remain strong based on limited competitive domestic meats and strong export demand," Hurt says.
Total meat supplies (beef, pork, chicken, and turkey) will undergo little change in 2014, Hurt notes.
Chicken production will rise about 3% and turkey about 2%. However, beef supplies are expected to drop 6% as a small calf crop and heifer retention will drag down beef slaughter numbers. Retail pork prices will be much lower than beef and will thus continue to pull some consumption away from beef at the retail counter. USDA analysts expect pork export demand to increase by 4% and represent nearly 22% of total production.