As the 2025 grilling season came to a close over Labor Day weekend, the animal protein segment befitted from strong demand and low feed costs, says Brian Earnest, lead economist-animal protein for CoBank’s Knowledge Exchange Division in The Quarterly report. Circana sales data showed dollar sales up for every animal protein category in the grocery store, led by beef.
“The top two drivers of profitability in the animal protein sector, inputs and demand, remain squarely in favor of producers,” the report says. “While integrated production systems are benefiting, beef packing margins have suffered from fragmentation. Another record yield for corn and soybean crops continues to pressure the outlook for feed costs, keeping the animal protein outlook favorable.”
Still, Earnest says other factors, including capital costs and labor challenges, are moderating expansion and growth ambitions.
Unique Market Opportunity
A slimming U.S. hog herd has presented a unique market opportunity with fewer animals available for slaughter, bumping up market prices, the report says. Price rallies for lean hog futures and feeder pigs persisted over the summer settling at 20% and 48% higher year-over-year, respectively, in late September.
Feeder pig prices have followed counter-seasonal trends since May compared to a year ago and the three-year average, the report shows.
“Historically, feeder pig prices will rally early in the year as those pigs will hit the market during peak lean hog prices in the summer,” the report says. “However, 2025 has been unprecedented with sustained momentum in the feeder pig market, along with 8.2% more hogs coming from Canada year-to-date in September.”
CoBank says lean hog futures had the highest and longest rally this summer since July 2022, peaking at $112.81 per cwt. in June with 12 weeks over $100 per cwt. This boasted well for producer margins, which have posted profits for 17 consecutive months. Farrow-to-finish margins in August were $52.58 per head, the highest since June 2021, according to Iowa State University.
Export Expectations
Export demand has slowed slightly in 2025 compared to 2024, which was a record export year for U.S. pork. Year-to-date through July, pork exports in dollars and pounds were down 3.6% from the prior year, Earnest says.
Because China is importing less pork from the U.S., Chinese hog farmers are currently under pressure to reduce their hog herd to improve margins after experiencing falling hog prices, the report explains.
“China’s hog herd largely rebounded after a bout of African Swine Fever a few years ago, which required heavier purchasing of U.S. pork to supplement the country’s supplies and demand,” the report says. “On the bright side, Mexico bumped up U.S. pork purchases by 2% to 1.5 billion pounds in 2025 through July.”
