WASHINGTON — The National Pork Producers Council (NPPC) recently released an economic update for the third quarter that provides data points on industry issues, trends and market conditions.
In its update, the trade association noted that California’s impending Proposition 12 would create significant challenges and market uncertainty for pig farmers around the United States.
NPPC noted that high production costs are still affecting farmers. Average costs and breakeven levels were 9% higher than one year ago, along with an increase of 60% from three years ago.
“The US pork industry is incredibly important not only to agriculture but to the entire US economy,” said Scott Hays, NPPC president and pork producer from Missouri. “As producers face an unprecedented economic environment caused by dynamic market conditions and exacerbated further by California Proposition 12, our industry is incredibly resilient as demonstrated by generations of farm families who continue to take pride in producing affordable, nutritious protein for consumers.”
During this year, NPPC found that negotiated average hog and pork cutout values have been around 20% lower than in 2022 for the same week.
“Prices have gained seasonal momentum over the past three months but remain below year-ago levels,” NPPC said.
Through mid-July 2023, hog slaughter and pork products increased an estimated 1.2% and 0.3%, respectively. The US Department of Agriculture projects that there will be a 1.4% increase in pork production this year, while domestic pork availability is expected to drop 2.5% to 49.8 lbs per capita for 2023.
NPPC stated that inflation cooled in Q3 to 3.1%, even with the rising prices of many consumer necessities like food and housing.
“Inflation, rising interest rates and other macro-level factors may continue to strain consumer purchasing power, which impacts demand for meat and pork,” the association said.