Great improvement seen in US pork sector in 2024 – CoBank

With feed costs down more than 25% in the second quarter, Iowa State estimates wean-to-finish operations averaged profits of more than $20 per head for the period, a huge swing from losses of $40 per head a year earlier, according to the most recent CoBank Quarterly. Not only have falling feed costs played a pivotal role in improving producer profitability, but value at the meat case also appears to be helping pork disappearance. COVID-pandemic related savings are depleted and consumers are relying more heavily on credit, which is supportive of disappearance of budget-friendly meat options.

Additionally, the wholesale cutout price strength of the first six months of 2024 and improved processor demand has brought with it a prolonged stretch of elevated hog prices. Lean hog values recently stalled out in the mid-90s, but this was largely a result of managed money being overextended rather than weak fundamentals. Exports are in outstanding shape: Nearly 31% of all pork and pork variety meats produced in the US were exported during the first four months of 2024, a record achievement.

Yet, cumulative sow slaughter was up 8.5% through the end of May. The pace is leading USDA sow slaughter forecast to reach 3.355 million in total during 2024, an increase of 5% YoY, besting every year since 2008. Usually, the increased sow slaughter would be indicative of contraction, but pigs saved per litter continues to surge. We are hearing this suggests a more productive breeding herd, so expectations for declines are limited. USDA forecast for pork production is up nearly 3% YoY for 2024.

The bottom line is while there may be some work to do in the months ahead as hog numbers swell and capacity tightens, the first six months of 2024 have shown much improvement for the hog and pork sector.

Tags: hog, estimates, pork, price, feed costs, demand