The National Pork Producers Council (NPPC) released its third quarter pork industry economic update to provide a snapshot of top pork industry issues, current trends, and marketing conditions impacting U.S. pig farmers.
Key takeaways from the Q3 update include:
- California Proposition 12 creates significant challenges and market uncertainty for pig farmers across the country and has far-reaching implications beyond the pork industry.
- Persistently high production costs continue to be a major challenge to pig farmers’ profitability. Average cost and breakeven levels are 9% higher than one year ago and have increased 60% over three years.
- So far this year, negotiated hog and pork cutout values, on average, have been about 20% below the same week last year. Prices have gained seasonal momentum over the past three months but remain below year-ago levels.
- Hog slaughter and pork production increased an estimated 1.2% and 0.3% respectively through mid-July 2023. USDA is now projecting a 1.4% increase in pork production this year, while domestic pork availability is expected to drop 2.5% to 49.8 pounds per capita for 2023.
- Inflation has cooled to 3.1%, though the prices of many consumer necessities like food and housing continue to increase more rapidly than the pre-pandemic average. Inflation, rising interest rates, and other macro-level factors may continue to strain consumer purchasing power, which impacts demand for meat and pork.
“The U.S. pork industry is incredibly important not only to agriculture but to the entire U.S. economy,” said Scott Hays, NPPC president and pork producer from Missouri. “As producers face an unprecedented economic environment caused by dynamic market conditions and exacerbated further by California Proposition 12, our industry is incredibly resilient as demonstrated by generations of farm families who continue to take pride in producing affordable, nutritious protein for consumers.”
To download the report, visit NPPC’s pork industry economic update page.
Listen to NPPC Economist Holly Cook discuss the report.