The year has kicked off with volatility as headlines drive rapid market shifts on an almost daily basis. In this column, I have traditionally focused on providing context around supply and demand fundamentals—how they interact to determine equilibrium prices and, in turn, profit margins for pig farmers.
Demand is always a wildcard, complicated by delayed and sometimes incomplete USDA data. While not impossible to analyze, it is far less straightforward than supply trends. Adding to the uncertainty, shifting tariff policies continue to reshape global trade. Chinese pork imports have declined dramatically over the past four years, reducing U.S. market share in what was once a much larger opportunity. Meanwhile, trade relations with Mexico and Canada remain uncertain, and the prospect of new reciprocal tariffs raise fresh concerns about future market dynamics.
While it’s easy to get caught up in the noise of political rhetoric and social media speculation, it is important to step back and focus on the big picture. With demand uncertainty looming, let’s take stock of what we do know: current supply conditions and the profit margin outlook for the next 12 months.
Pork production
Year-to-date hog slaughter is down 3.7%. Carcass weights are an interesting data point through the first quarter. Producer sold carcass weights are about 3-4 pounds heavier than a year ago. Packer owned weights have largely been lower than a year ago and several pounds below levels witnessed in 2022 and 2023.
Click here to see more...