Jim Long Pork Commentary, USDA Projects Increased Pork Production, July 15th 2024

Last week the USDA reported their projections for pork production in the quarterly animal production report.

The USDA is projecting an increase of 837 million lbs. in 2024 above 2023 (+3%). It is projecting another 411 million lbs. 2025 vs. 2024 (+1.4%). From 2023 to 2025 +4.4%.

We must live in a resilience industry. According to Iowa State University, farrow to finish (available online) losses in 2023 averaged just over $30 per head. In 2024 January to July losses have been $8.50 per head. Current breakeven price is 87.06 carcass per lb. according to Iowa State. With current October lean hog futures 70.15, December 62.375, February 67.50. The fall and early winter profit outlook doesn’t look good.

Year to date U.S. pork production is up 1.2%. To reach 3% as USDA projects for 2024 we need to have 4.8% increase over the balance of this year. That’s not going to happen.

We still expect that the losses for 20 of the last 24 months has led to liquidation. USDA in our opinion is over estimating pork supply and this is leading to pushing future prices lower.