TL;DR:
- Steve Meyer from Ever.Ag presents a cautiously optimistic pork outlook at the Illinois Pork Expo, noting improvements but still challenges ahead.
- Input costs are decreasing, demand is recovering, and herd health has significantly improved, yet profitability remains uncertain.
- Mexico has been crucial for U.S. pork exports in 2023, while challenges persist with China due to tariffs and political tensions.
During a recent presentation at the Illinois Pork Expo on January 30, 2024, Steve Meyer, Chief Livestock Economist at Ever.Ag shared insights into the current state and prospects of the pork industry. “Things are looking better, but not good,” Meyer remarked, highlighting the nuanced recovery the sector is experiencing.
Despite lower input costs, strengthened wholesale demand, and notably improved herd health, the path to profitability is fraught with uncertainties.
Demand Dynamics and Export Challenges
Meyer pointed out that pork demand soared to new heights in 2021 and 2022, only to see a decline beginning in October 2022. This fluctuation closely mirrored real income levels, significantly influenced by stimulus funds. Looking ahead to 2024, Meyer anticipates a slight decrease in pork per capita consumption, underscoring the need for cautious optimism rather than outright enthusiasm for growth.
The role of Mexico as a pivotal market for U.S. pork exports in 2023 was underscored, with Meyer cautioning against overreliance on this market due to potential competition from Brazil. The economist also dismissed the likelihood of China significantly boosting U.S. exports, citing lower imports by China in 2023 compared to 2022 and ongoing trade and political challenges.
Supply Side Concerns and Producer Strategies
Addressing supply issues, Meyer highlighted the continuous increase in litter sizes, posing a dilemma for managing the breeding herd. Despite high sow slaughter rates in the summer of 2023, the breeding herd has not seen substantial reductions, indicating persistent supply pressures.
For producers, Meyer advises a defensive strategy, emphasising risk management in light of the uncertain market conditions. He concluded his presentation with several key takeaways for pork producers, including limited cost reductions, stable consumer-level demand, modest export growth, and the likelihood of the breeding herd eventually shrinking, all of which will influence the market dynamics in 2024.
