Robust exports. A return to profitability? Lower feed costs. Near-record U.S. pork production? The factors affecting the pork outlook are numerous and worthy of a deeper dive with the experts. Farm Journal’s PORK asked five economists to share their thoughts on what’s ahead for the second half of the year.
- Scott Brown, economist at University of Missouri
- Erin Borror, vice president of economic analysis at U.S. Meat Export Federation
- Christine McCracken, executive director, animal protein at Rabobank
- Altin Kalo, head economist at Steiner Consulting Group
- Lee Schulz, economist at Iowa State University
Q. WHAT’S YOUR PORK OUTLOOK FOR 2024?
EB: I expect record exports with the U.S. to overtake the combined EU-27 to be the largest pork exporter in the world. In addition, I believe we’ll see near-record U.S. pork production due to productivity growth. Hog and pork prices will climb higher than 2023 due to the rebound in domestic demand plus continued export growth. I expect a return to producer profitability on stronger prices and lower feed costs.
SB: I expect hog prices for the remainder of 2024 to remain above 2023 levels unless domestic demand softens. They should be 4% to 6% above the 2023 levels. 2024 pork production should be about 1.4% above the 2023 level.
AK: My expectation is that pork supply will be higher year over year in the summer and near the same level as a year ago in the fall. Winter is a bit of a tossup, but at this time my expectation is for steady to lower pork supplies next winter. As for pricing, I expect the cutout to trend higher in the next three months, in line with seasonal trends but well below some of the lofty expectations that futures traded in early spring. Fresh pork demand appears to be in good shape, but more cracks are developing for processing items. Hams tend to benefit from robust exports, but bellies rely heavily on foodservice demand and so does pork trim. Exports and softer foodservice demand are expected to present more headwinds for wholesale pork prices in the fall.
CM: We are looking for a good year for packers and producers with both segments profitable for the year. While it is still early in the year, the supply and demand of pork are in balance which is supportive to price and allowing the industry to rebuild balance sheets. Lower feed costs have also made a huge difference for producers.
LS: As the bearer of the Iowa State University Estimated Returns Model for farrow to finish production, I always feel it’s my role here to provide an outlook on profitability. Average annual returns are forecast close to break-even for 2024, based on mid-May estimates. As recently as early January an average annual loss of $18 per head was projected for 2024. While conditions have improved notably, challenges still remain. April was the first profitable month since July of last year and only the second profitable month since August 2022. While seasonally stronger prices may help uphold profits through the summer, losses are currently expected for this fall and winter.
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