It’s been a challenging year for pork. The National Pork Producers Council says input costs were up more than 50 percent from where they were three years ago. And the price of pork isn’t supporting that.
Holly Cook, economist for NPPC, says the bright spot for farmers is exports, but other than that, producers are faced with incredible economic challenges.
“Starting in the fall of 2022, we saw hog prices that maybe would be good relative to history but started to not be efficient to offset very high cost of production,” she says. “As we see things like domestic consumer demand be softer than it was… as well as the supply of pork and hogs that are very similar to a year ago, we’ve seen profits turn very negative.”
She points to a decline in consumer income for lower pork demand. Cook explains that the stimulus payments and increased SNAP benefits during the pandemic boosted consumer income. When that stopped in 2022, consumer income had declined.
Consumers have less spending money, but the price of pork at the grocery store continues to stay the same, Cook says. While hog prices look good compared to historical numbers, the input costs are what’s driving farmer incomes lower — historically lower.
“It’s because we have such high costs that we’re seeing very, very negative profits, and so that is one of the worst average loss periods we’ve had in 20 years.”
The bright spot for pork is exports.
“They (exports) account for about 25 percent of our production, so seeing increased volumes is certainly helpful,” Cook says. “It’s likely that U.S. pork has been able to become a little bit more competitive in some of these markets as we see reductions and higher prices in other countries that are top producers and top exporters.”
See a recent article on positive pork export news: https://www.midwestfarmreport.com/2023/12/27/philippines-extends-lower-pork-tariffs/
