Demand for Pork

     As demand continues to languish, Smithfield plants in the midwest and Tyson slowed kills as a means to boost prices at the wholesale level.  The strategy appears to have worked as the LS500 (Carcass Composite) price picked up over $10/cwt in the last 10 days but live prices remained stuck in the mid to upper $50 range. 

     USDA reports year-to-date slaughter down a little over 4%, just shy of 2.6 million head.  The biggest problem remains the export markets where May results revealed exports down over 30% from a year ago.  Japan was perhaps the biggest disappointment since its demand had remained firm until the recent report where the month over month decline was just over 13% and the year over year decline over 15% in tons shipped.  China and Hong Kong are returning to 2006-2007 levels and were down dramatically since the purchase boom of last year.

     Unfortunately, we are at a time not only in the meat industry but also in the general U.S. and world economy when what little anyone had to make a forecast for the future has largely disappeared into an opaque soup of uncertainty.  There is little doubt that demand for meat, both in the United States and worldwide, is tied to among other things, per-capita income and a behavioral variable related to perceived and actual wealth (although there is some controvery about the wealth effect).  Both are down with rising unemployment and plummeting asset values.