Prices and Profits Are Not One In the Same, But Economists are Cautiously Optimistic

The room was packed despite it being a beautiful day during World Pork Expo in Des Moines, Iowa. Both Lee Schulz, chief economist at Ever.Ag, and Joe Kerns, founder of Ag Rubicon, expressed economic optimism for the pork industry. However, the prospects for producer profitability sound less sunny than the sky outside.

Pork Demand and Prices On the Rebound

Consumer demand is still below 2020 to 2024 levels but it’s recovering. Compared with historical numbers, though, demand is still good, Schultz assures. The story behind demand is affected by many factors, such as consumption, price and consumer income.

The importance of these factors, namely consumer income, is shifting, which is good for the pork industry. Pork still has a highly advantageous cost spread with beef and a much steadier supply due to the contraction in the cattle cycle.

“I think the industry is in a much healthier spot today [for supply] than maybe it’s been the last couple of years because we squeezed out some of that excess capacity,” Schulz says.

Summer cutout prices should be strong, he adds, with a predicted 4% increase versus a 3% increase in 2024. Schulz emphasizes that prices, even in recent years, have been in the top 10 historically. However, profitability is a different story.

“2023 will go down as the worst year in pork producer profitability to date at over $30-per-head loss. 2024 was roughly breakeven. 2025 we’re seeing about a $15-per-head profit. If this proves true, it will be the quickest turnaround in pork producer profitability ever. But it says much more about how bad the situation was in 2023 and 2024 than it says about 2025.”