Profitability is always a moving target, as Rabobank economist Christine McCracken shared on the latest episode of The PORK Podcast. However, she remains “quite optimistic” heading into 2025.
“The good news is that a lot of the trends that drove better profitability at the end of 2024 are going to continue into early 2025,” she explains. “We’re going to have ongoing low feed costs, especially on meal for pig producers. At the same time, hog supplies are relatively well-balanced, which is supportive to the market in the short run. The industry is doing a good job controlling the aspects of the business it can impact.”
She says the big unknowns at this point are factors that could impact global pork trade, especially proposed tariff increases. She encourages producers to consider tools to remove or reduce risk.
“Maintaining current biosecurity standards and focusing herd health is an everyday priority for producers. It’s a good reminder that keeping these pigs healthy is the only way to ensure the industry can stay profitable,” McCracken says.
Another big challenge the industry faces, especially at the packer level, is labor costs. She points out that tightening immigration standards under the new administration could lead to a repeat of earlier supply chain disruptions, she points out.
“Not only could our packers see constraints on worker availability, but we would also expect higher turnover and increased absenteeism. We could also see increased issues with on-farm labor availability,” McCracken says.
The list of potential challenges is notably present as she looks ahead to the coming year.
“Everyone in hog business is a strong competitor,” McCracken adds. “Otherwise, they wouldn’t still be in the industry. But at the end of the day, I think it’s all in controlling what you can control – managing that risk and working with your advisor to make sure that you’re taking advantage of some good profit opportunities.”
A Unique Perspective
Scott Brown, emeritus associate Extension professor in ag economics at the University of Missouri, notes McCracken plays a crucial role in providing the pork industry with sound economic analysis of pork markets.
“That extends to a view of the economics of the pork industry worldwide,” Brown says. “Her timely analysis of pork markets has provided industry participants with information they have been able to use to make better decisions regarding their operations.”
McCracken says it’s her love for the industry that motivates her each morning.
“I’m always trying to inform the industry, or at least provide added insights, so the pork industry is able to have a more complete picture when making decisions,” she explains. “I think a difference of ideas in the industry is important. We have a lot of great economists, Scott being one, and there’s a number of really great people that I’ve worked with over the years. I think all of those opinions help build a more complete picture.”
She relies heavily on her counterparts in other Rabobank offices around the world to better understand the global markets.
“It warms my heart when I can make a difference and help drive the conversation forward,” McCracken says. “It’s also personally rewarding to work with so many great people in an industry that’s meant a lot to me over the years.”
It’s About People First
It’s been a tough year for producers. McCracken advocates for establishing an open dialogue on mental health topics to reduce the stigma.
“I think personal struggles are always such a tough topic to speak to in any open format,” she says.
That’s why McCracken encourages one-on-one conversations to help each other through hard times.
“Checking in with your neighbors and friends on regular basis, not just about business, but asking them how they’re doing personally is so important,” she says. “Not being afraid to talk about it is so important. I think we as an industry can always do better in making sure that everyone’s in a better place, providing resources when they need it and just letting them know we have their back.”
Don’t miss a minute of this conversation with industry icon Christine McCracken that stretches from the pork outlook to mental health and from international insights to parenting college kids.
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