U.S. pork industry expected to grow through 2025

Oct 17, 2017

Pork exports will need to increase by 400,000 tons

Staff Reporter

The U.S. pork industry will continue to expand through 2025 but will be dependent upon export capacity.

The hog market has transitioned from lagging production to a recovery phase over the last 10 years. However, industry expansion, along with increased production efficiency and processing capacity, could improve margins along pork supply chains, according to an Oct. 11 release from Rabobank.

Accompanying this industry expansion is an expected slight growth in domestic consumption per capita, but only within a historical range. U.S. consumer demand for specific pork cuts may lead to periods of high market volatility, according to the release.

Exports are becoming the most critical element of demand for U.S. pork. To promote expansion of the industry through 2025, U.S. pork exports must increase by 400,000 tonnes.

“Exports are necessary for future expansion but are not guaranteed,” Sterling Liddell, global data analyst at RaboResearch Food & Agribusiness, said in the release.

Global pork trade is evolving due to increased international competition and geopolitical issues. For instance, U.S. pork exports to Mexico and China may encounter domestic competition as those countries are expected to ramp up production as well.

“Mexico continues to grow its sow inventories and slaughter plants, making it only a matter of time before Mexico boosts domestic production,” Liddell said.

Indeed, slaughter capacity and efficiency are pivotal deciding elements between sector stagnancy and expansion, the study found.

In the report, Sterling outlined three key aspects of the pork industry that need to be considered in planning over the next decade.

The industry requires intensive risk management systems that account for volatility.
The sector needs to analyze the influence new domestic competition has on the packing industry and the resulting effects on U.S. processing efficiency.
The industry has to be mindful of changes in U.S. consumption patterns. These changes include a shift in focus from lean cuts to enhanced flavour profiles, as well as changes in how consumers obtain their meat products, such as through Amazon.

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