High Retail Prices, Soft Demand Cloud U.S. Pork Outlook

Pork production isn't for the faint of heart. U.S. pig farmers are facing an increasingly challenging economic environment that is likely to persist through the remainder of 2023, according to the latest CoBank’s Knowledge Exchange report.

Persistently high operating costs combined with depressed hog values are destroying producer returns and limiting overall industry growth. Although it's true hog prices have risen this summer, they have not kept pace with skyrocketing costs for feed, labor, construction and other expenses, the report notes. 

Market challenges are compounded by soft domestic demand for pork and a murky outlook for U.S. pork exports. Meanwhile, persistently high retail pork prices and a decline in food-at-home spending in the U.S. are limiting domestic consumption growth. Worldwide demand for U.S. pork has come under pressure as China’s hog supplies have rebounded from the outbreak of African swine fever (ASF). The totality of adverse market conditions, which include higher borrowing costs, will limit U.S. herd expansion and tighten hog supplies, the report says.