Things to Consider….
Total US pork exports climbed 32.8 million pounds or +5.0% from last reported as most major destination for US pork reported increases. Notably, the latest data for May reached a new high for the month historically. Compared to year ago levels, current US pork exports are up +11.3% however are -0.4% under last year-to-date. Some of the largest increases including destinations such as Mexico, China & Japan. Mexico rose 12.2 million pounds from the levels in April and represents the highest month recorded this year to date. Compared to last year Mexico was up +95.3% compared to last year; however for perspective, May 2020 was the lowest month recorded since March 2013 at 74.7 million pounds.
Mainland China increased their imports of US pork by 11.0 million pounds, while Hong Kong and Taiwan both recorded modest declines for an adjusted China* rise of 10.1 million pounds. Despite the significant drop from last year, down -38.3% from May 2020, current pork exports to China* remain significantly higher than more typical seasonal levels for this time.
US pork to Japan climbed 9.7 million pounds and was followed by increases to South Korea, Colombia and Honduras which were generally up 3.5 to 5 million pounds each on the latest report.
US pork to the Philippines dropped 9.0 million pounds or -23.1% lower, coming down considerably from the record highs of the previous two reports. US pork exports to the Philippines have been boosted by a reduction in tarrifs, with the latest report reflecting the 3rd highest month historically.
Lean hog futures have recorded back to back positive weeks while cash has also stabalized following the mid-June restructuring. Late year forward contract prices are now within $5-8 CAD per ckg of the early June top. Producers should look to be setting targets near the previous highs for late 2021 and early 2022 production.