Hard Questions the Pork Industry Needs to Tackle in 2021
When everything is working really well, the highly efficient U.S. pork production system is great. But as the industry saw in 2020, all it takes is one kink in that system to create upheaval.
“Keeping all the pieces in balance and working together is the key,” says John Nalivka, president of Sterling Marketing.
As the industry looks ahead to 2021, five economists weigh in on the most important question the pork industry needs to ask itself now.
Dan Basse, president of AgResource Company
How long will China import demand persist with their hog herd in dramatic expansion?
Scott Brown, economist at University of Missouri
How does the U.S. pork industry adjust to a potential slowdown in the growth of exports? There are many signals pointing to a tougher period to continue to grow exports and the recent expansion seen depends critically on China. The soybean industry experienced the effects of depending on one market too heavily and the pork industry should be planning a strategy if the same issue occurs. China’s recent self-sufficiency goals in pork may not be attainable quickly but they should not be ignored.
Dermot Hayes, economist at Iowa State University
What do we do when Chinese pork production recovers in 2023 or 2024? We need alternative export markets.
Christine McCracken, executive director – animal protein at Rabobank
What will the industry look like in 10 years and will my operation be competitive? The pace of change in the industry is accelerating, as technologies improve and markets become more global. Will producers adapt to this new environment and meet customer expectations around traceability, sustainability and quality? What is already clear is that the hurdles keep getting higher. Packers are also facing a more challenging operating environment, with greater regulatory scrutiny, new global competition, an aging workforce and continuously evolving needs of the consumer. Ultimately, the industry needs to consider whether it will continue to compete on cost or if new tools and technologies might offer new opportunities for growth.
John Nalivka, president of Sterling Marketing
How long will China be in the market to the extent they are, representing 31% of our U.S. pork exports? China won’t always depend upon the U.S. to the extent they are now. Are there other markets that we can continue to grow as China gets its herd back in production and doesn't need to buy as much pork from us as they are now? To me, that's the $64 question on the export side and not getting ahead of ourselves because of current profitability.
This is the third story in a three-part series. Read the full series.
More from Farm Journal's PORK:
2021 U.S. Pork Outlook: Volatility and A Little Optimism
Don’t Assume Anything in 2021, Economists Advise Pork Producers
