Pork producers are experiencing major headwinds with the cost of production not necessarily balancing market prices. National Pork Board staff and producer leaders are listening and empathizing with producers, while doing their best to help economists shed light – and even a ray of hope – on market conditions. Iowa State University’s Dr. Lee Schulz said the industry may be entering a period of stronger seasonal prices.
“That may provide a little bit of relief, at least from the large losses that we’re seeing,” Dr. Schulz said. “But realizing that cost of production really does remain a key challenge for producers, and I think we’re all really cautiously maybe optimistic that we do see, maybe feed prices come down as we get into the fall.”
All too often, we only focus on factors we can control, but Dr. Schulz said we need to focus on those outside areas that add uncertainties for producers as well.
“They’re realizing the fiscal policy, the monetary policy, those are all impacting producer profits,” Dr. Schulz said. “And that’s what producers are responding to, that’s what drives expansion and contractionary plans and execution by producers. And all of those factors I think are working towards the negative for producers.”
One bright spot for the pork industry has been the continued growth in the export markets.
“Exports have been stronger than anticipated,” Dr. Schulz said. “Also, as you think about the strength of the U.S. dollar, that has impacts on both exports and imports. And, we talk about exports here, that makes our products more expensive, all else equal in that global markets for us, I would say that’s stronger than anticipated, given the strength that the U.S. dollar has seen.”
Dr. Schulz added that moving into the next hogs and pigs report on June 29 will help to better understand some ongoing adjustments in the industry, specifically with a potential pulldown in production. For more information, visit porkcheckoff.org or call toll free at 1-800-456-7675.