Skyrocketing costs derailing expansion plans for U.S. pork producers

Jul 31, 2023

U.S. pork producers are facing an increasingly challenging economic environment that is likely to persist through the remainder of 2023. The combination of elevated operating costs and depressed hog values are evaporating producer returns and limiting overall industry growth. While hog prices have risen this summer, they have not kept pace with skyrocketing costs for feed, labor, construction, and other expenses, a new report from CoBank’s Knowledge Exchange notes.

According to the report, feed costs in 2022 alone were up 19% year over year, but hog values were up just 14% and came under pressure during the first six months of 2023. Over the long run, the disparity between hog prices and feed costs is even larger. The report pointed out that during the 12 months ended June 2023, live basis negotiated purchases of barrows and gilts averaged $67.00/cwt., up 45% from the average from 2016-2020. Comparatively, corn and soybean prices were up 78%.

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Video: What Does 20 MILLION Hogs a Year Look Like?

?? The Multi-Plant System Processing 20 Million Hogs Annually in the Midwest JBS USA operates multiple large-scale pork processing facilities across the Midwest, including major plants in Iowa, Minnesota, and Indiana. Combined, these facilities have the capacity to process approximately 20 million hogs annually.

Each plant operates high-speed automated slaughter systems capable of processing up to 20,000 head per day, followed by fabrication lines that break carcasses into primals, sub-primals, and case-ready retail products.

Hog procurement is coordinated through electronic marketing platforms that connect regional contract finishing operations and independent producers to plant demand schedules. This digital procurement system allows for steady supply flow and scheduling efficiency across multiple facilities.

Processing plants incorporate comprehensive food safety systems, including pathogen intervention technologies, rapid chilling processes, and integrated cold-chain management. USDA inspection is embedded throughout the harvest and fabrication stages to ensure regulatory compliance and product integrity. Finished pork products — from bulk primals to retail-ready packaged cuts — are distributed through coordinated logistics networks serving domestic and export markets.