It’s No Surprise What’s at the Center of Pork Industry Conversations Now
It’s no surprise the economic crisis of 2023 is at the center of winter trade show chatter and producer conversations. Brett Kaysen, National Pork Board Senior Vice President, Producer and State Engagement, says it will go down as the most catastrophic economic year in the history of the swine industry.
“A lot of people talk about ‘98, but this is worse. And no matter who you talk to, what you read, what analyst you have conversations with, 2024 doesn't look very bright either,” Kaysen says. “It looks better, but not great.”
During conversations at the winter trade shows or over the phone, Kaysen says they almost always center around economics, lack of profitability, and how long can producers burn through this equity and capital to survive?
Where’s the Future?
“Not to be Debbie Downer here, but this is the reality now,” he says of the biggest topic on everyone’s mind.
Everyone wants to know what the future is going to look like, he adds.
“I had a conversation with a producer in his 70s that has 700 sows, independent farrow-to-finish. He's got two sons in their 20s. The conversation is ‘what do I do? Should I just punt and be a grain farmer and be done? Or do you think this thing is going to turn? Should I let these two boys that are excited about the pig business get in?’”
Kaysen says it’s all about economics.
“Now, this too shall pass. We've been through these things before. These pork producers understand they're in a cyclical market,” he points out.
But it won’t be easy for everyone to survive these times.
How is the Pork Checkoff Driving Domestic Demand?
The second topic Kaysen hears the most about surrounds what Pork Checkoff is doing to drive domestic demand?
“Our board of directors has put additional millions of dollars towards this effort, which I applaud them for. The total pork category consumption per capita has been 50 to 52 pounds for two decades. The Baby Boomers have been our best customer, but they are aging out. The challenge becomes Gen X, and even the Millennials and Gen Z, will not make up that difference in consumption patterns,” Kaysen explains.
He believes the focus needs to shift to kids his daughter’s age and younger – Generation Alpha – kids born between 2010 to 2024.
“We’ve got to make sure that pork is relevant in their diets. The good news is the Alpha Generation (and Beta Generation born 2024 to 2039) will make up 27% of the American population in 2032. They are going to be the biggest portion of the population. So, we're moving our domestic mentality to how do we touch those people now to make sure pork is relevant to them.”
One of the major shifts to reach the younger generations will be realizing that they aren’t thinking about pork as the center of the plate. They are thinking about pork as an ingredient. How do I get protein on the go? How do I get it in a bite-sized snack? How do I consume it before or after a workout?
“That creates an opportunity for innovation,” Kaysen says. “But if we don't do something differently, the data suggests a significant drop in fresh pork consumption in the years ahead. “
Data shows in 2017, the per capita consumption of fresh pork in the U.S. was 17.4 lb. In 2022, that number dropped to 16.6 lb. If that trend continues, in 2032, the fresh pork per capita consumption would be 14.4 lb.
That data turns pork producers’ heads pretty fast. He’s quick to point out that he’s excited about data showing a huge return on investment with pork promotion to multicultural audiences. The Hispanic community is growing fast in the U.S., and they love pork. He says this is a bright spot for the U.S. pork industry’s domestic demand opportunity.
Challenges of Today and Tomorrow
One thing producers can cautiously celebrate is growth in foreign animal disease (FAD) prevention and preparedness, Kaysen says.
“Producers continue to ask if a foreign animal disease were to strike, are we ready for it? The good news is, we're more ready than we were three years ago. But I don't know if you can ever be ready,” he says.
FAD prevention and preparedness is and needs to continue to be top of mind for producers. Kaysen says the longer we keep the disease out, the more confident he believes the producer community will become about the country’s ability to keep it out.
“Now we've got to be diligent and there is some foreign animal disease prevention and preparedness fatigue out there,” he notes. “But I constantly encourage producers that biosecurity is key. Let us not forget if it were to come here that 25% of our market (international exports) would go away overnight.”
Lots of questions are circling about labor now, too. Producers are struggling to find help and keep help on the farm, Kaysen says.
“Some producers are moving to the point where they are focusing more on what technologies they need to replace human capital when and if appropriate someday,” he adds.
The Bright Light of 2023
The pork industry basically had one highlight in 2023, Kaysen says. Exports were good in 2023 and producers are hopeful about that momentum.
“The conversation then goes to which countries will open up next to work with the U.S. pork industry,” he adds. “We're doing a lot of different work in Central America. The National Pork Producers Council (NPPC) is doing a great job of knocking down some of those trade barriers and that's where the checkoff comes in with U.S. Meat Export Federation and partners to promote.”
Although there are always political headwinds to face, he’s excited about the good work NPPC is doing to improve trade opportunities around the globe.
There’s no question the road ahead of pork producers in 2024 isn’t an easy one. But with an innovative and adaptable mindset, Kaysen says there is reason to have hope.
“It's going to take a challenge of a ‘we mentality.’ When you start talking about big and bold and different and innovative, some folks will defer to ‘we can't do that. It'll never work.’ That's not the thinking we need today. We need to think about ‘yes, if.’ It takes everybody up and down the supply chain working in harmony to build that conduit of continuity.”
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