We are facing the first year-over-year decline in net exports since the U.S. industry became a net exporter in the mid 1990s. Even with the potential prospect of fewer total pigs slaughtered in the U.S. in 2009, due to a potential decline in both U.S. production and imports of weaned pigs and finished animals from Canada, 2009 seems to be setting up to be a very tough year. Here are the reasons for caution and why the spring futures prices may fall to meet the slogging cash prices.
First, we now know that all of the major countries which are key importers of U.S. pork are facing substantial declines in GDP, declining land and home values, increased unemployment and in one case, the potential descent into political chaos.