The coming year looks profitable for the pork industry.
“Many are expecting similar production levels in 2025,” says Lee Schulz, who is currently on leave from Iowa State University serving as chief economist with Ever.Ag’s livestock division.
He says several things factor into those numbers, including disease pressure and feed costs.
“Lower feed costs are going to provide an incentive to put more pounds on those pigs and market them at heavier weights,” Schulz says.
He is forecasting a $12 per head profit for an average farrow-to-finish producer in the United States. Schulz says producers broke even in 2024, and that comes after prices were down significantly in 2023.
“This may be the quickest turnaround we’ve ever seen, although it really says more about the disaster that we had in 2023,” Schulz says.
Production cost were down 4.7% in 2024, although Schulz says that is still 34% higher than production costs in 2020. He expects that to go down another 5% in 2025. Schulz says 2025 will see the pork industry continue to return to a balance between supply and demand. He says demand has been very positive in 2024, with the second and third quarter numbers showing year-to-year increases in demand.
“This comes after six consecutive quarters of a decline in demand, and I do expect demand to continue to grow in 2025,” he says.
Inflation will continue to impact the industry, Schulz says.
He says there is some uncertainty in the export market. President-elect Donald Trumps has threatened tariffs on imports, and Schulz calls that a concern.
“Exports continue to be the shining star for the industry, both in volume and value,” Schulz says.
Schultz says there is nothing in the market to suggest expansion will be happening anytime soon.
“We’re coming off three years of stress in the market, and there’s still a lot of financial healing that needs to be done,” he says.
“We are also seeing an increase in productivity, so we don’t need as many pigs as we once needed.”
Schulz says he believes there is reason for optimism heading into 2025.
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