Global population growth and increasing wealth have created a steady rise in consumers with greater purchasing power over the past few decades. This predictable growth has benefited suppliers of goods and services across industries and continents. However, we now face a shifting landscape where the number of pork consumers is declining at an accelerating rate. This trend alone is concerning, but when paired with President Trump’s recent “Liberation Day” tariffs, which have disrupted the global economy, the situation becomes even more worrisome.
While the full short-term effects of the new tariffs are still unfolding, they could range from considerably higher costs for many goods, to ushering in the end of the era of globalism. As costs rise and global trade becomes more strained, consumers will have less disposable income, leading to more budget-conscious eating choices. If a recession occurs, this effect will be even more pronounced.
The good news is that pork prices have historically been relatively unaffected by economic downturns, as shown during the last three recessions (see Figure 1). However, before we breathe a sigh of relief, research from Kansas State University’s Meat Demand Monitor reveals that economic challenges do have an impact on the quantity of pork consumed. As economic conditions worsen, people eat less and less meat. Additionally, if inflation drives pork prices higher, consumers may abandon higher cost cuts altogether as they seek out cheaper alternatives. Should reduced demand lead to an oversupply of pork, expect prices that are no longer immune to economic downturns.
A Shift Toward Non-Traditional Pork Products
Despite these challenges, there are opportunities in the market. Consumer demand is shifting, with an increasing interest in what could be called non-traditional pork products. Millennials and younger generations, in particular, are willing to pay more for these products. The National Restaurant Association’s annual report on industry trends highlights pork as a key player in these changing preferences year after year. Consumer desires range from more flavorful cuts and pork that suits ethnic cuisines to products that are locally raised and environmentally friendly.
To better meet these evolving demands, the National Pork Board has launched initiatives aimed at understanding consumer preferences. While this is a step in the right direction, more needs to be done to connect consumers with producers. Effective solutions will include better data flow through the pork supply chain, resources to help producers reach various consumer segments, and greater collaboration between producers, packers, and retailers such as restaurants and grocery stores.
By embracing these changes, it becomes easier to identify emerging opportunities and target new demand segments that might have previously been overlooked or underserved and do so with speed and precision. In these uncertain times, one of the keys to success will be diversification and adaptability. Those who rely solely on low-cost production to maintain profitability may find themselves underequipped to handle the challenges of the future. The ability to pivot and meet evolving consumer needs will provide additional tools to achieve and maintain a competitive edge that will keep the industry successful.
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