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Hog inventory up slightly, pork demand remains crucial

A livestock economist says the slight year-over-year increase to the U.S. hog herd could pressure producer profitability.

Iowa State University’s Lee Schulz says there are modest profits in the industry right now and that should continue for the next few months.  “But getting into some red ink as we get into the 4th quarter,” he says.  “Winter and then possibly a resumption of profitability as we get back next into spring and summer.”

Market analyst Brett Stuart, president and co-founder of Global AgriTrends, says long-term profitability will largely depend on demand. “Can we export ourselves into a better spot,” he says. 

He says U.S. pork remains competitive on the global market, and there are opportunities for demand growth. “We’ve seen some big market share growth in Korea and in Australia,” he says.  “We’ve seen some good growth in the former CAFTA countries some of those Latin American countries.  We know that European pork faces some serious threats, and we’ll likely see production declines for the next decade.”

Stuart says he expects some liquidation in the industry, but doesn’t expect it to outpace increased productivity.