US pork production in Q1 2020 is estimated to increase to 7.4 billion pounds, up 8% compared to the same period in 2019, driven by high slaughter hog numbers. Despite the estimated increase in pork production, Mintec US pork prices were up 6% in February 2020, compared to the same period a year ago. The main reason behind the price increases seen so far this year is the strong pork exports to China and Mexico (up 39% y-o-y in January). US pork exports to China reached exceptional levels in January, driven by continued pork supply deficits caused by African Swine Fever losses in China. High pork prices can also be attributed to packer competition for hogs, to fill expanded processing capacity, along with solid domestic and foreign consumer demand for pork.
Furthermore, prices are likely to be firm in Q2 2020 on the back of higher export projections during the period. Second-quarter exports are expected to reach 1.8 billion pounds, about 16% higher than the previous year. However, logistical obstacles related to the coronavirus pandemic have made China a more challenging market to serve in early 2020 and is thus likely to restrict export growth in the next six months.