National Pork Producers Council (NPPC) economist Holly Cook presented a hog market update and economic outlook during a recent webinar for members of the Iowa Farm Bureau Federation.
Overall, profit conditions have improved significantly for pork producers compared to 12 months ago. Cook pointed to reports from Iowa State University showing that the average return for farrow-to-finish producers in 2024 was a negative $1 per hog, as severe losses in Q1 2024 were nearly offset by positive returns from April to December, averaging $7 per head. She says this represents a significant improvement from how producers entered 2024.
Cook’s update included these key points:
• The average cost of production in 2024 decreased by 12%, or $24 per head, due to lower average feed costs.
• Average producer-sold net hog prices for mid-February were up $10 per carcass hundred weight compared with the same week last year; weekly net negotiated prices were up $17.
• Hog slaughter is down 1.1% year-to-date, but due to heavier carcass weights, pork production is down less than 1%.
• USDA forecasts show a 2.7% increase in pork production along with a 4.0% increase in hog prices expected for 2025.
• The breeding herd over the past five years has declined 8.4%, but continued growth in the number of pigs saved per litter resulted in a new record-high pig crop reported for the September-November period.
• Pork exports set new volume and value records in 2024 and remain critical to the wholesale pork demand picture.
Based on reports from USDA’s Risk Management Agency, Cook said expected gross margins for hog producers over the next six months are the third highest since 2011, behind only 2014 and 2021.
“The U.S. pork industry is a vital pillar of our nation’s agricultural economy, contributing more than $62 billion annually and supporting hundreds of thousands of jobs across the country,” NPPC said in the latest issue of Capital Update. “Producers are committed to delivering wholesome, affordable pork products that not only feed millions of families but also drive economic growth and innovation in rural communities.”
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