A better year ahead: pork producers optimistic this year at World Pork Expo
Despite an ongoing trade war and low profitability the past two years, pork industry leaders and producers at the World Pork Expo in Des Moines said Wednesday they are optimistic about the year.
Lee Schulz, chief economist for Ever.Ag, said 2025 could be the 'quickest turnaround in pork producer profitability ever' — but, he clarified, that statistic says more about 'how bad the situation was' the past two years than it does about 2025.
High input costs and decreased demand in 2023 caused what Schulz said was 'the worst year in pork producer profitability to date.' That was followed by 2024, which Schulz called a 'break-even year' which, while better than 2023, didn't alleviate producers' financial stress.
Schulz's modeling for 2025 profitability, based on USDA statistics, predict $15 per head profitability increases for producers and a return to break even, when accounting for 2020 and 2023 losses, by August.
Schulz said despite continued challenges facing the industry such as increased input costs, labor, and processing and slaughtering costs, pork producers are more efficient each year.
He said trends of increasing litter rates and carcass weight in the industry mean that even with a historically low-breeding herd in December, pork producers 'are going to produce the most pork per breeding animal ever.'
'The efficiency, the productivity of this industry, is tremendous, and that trend is continuing to increase over time — even through challenges like we've seen in 2020, and 2023,' Schulz said.
Shulz also said the new sausage production facility slated to be built in Perry by JBS 'speaks to the health of the industry.'
According to National Pork Producers Council, the export market makes up more then 25% of U.S. pork production, and 55% of exported U.S. produced pork variety meats exports go to China.
In April, China posted reciprocal tariffs on U.S. goods, which equated to a total tariff of 172% on U.S. pork entering the country. The two countries agreed to a 90-day reduction on the tariffs May 12, which resulted in a 57% tariff on U.S. pork imported to China, according to National Hog Farmer.
Joseph Kerns, a long term agricultural operations consultant now with AgRubicon, said pork producers should 'be selfish' and take advantage of the current market volatility caused by tariffs and other factors.
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'You can either hyperventilate or you can do something,' Kerns said.
He advises producers to remove themselves from the risk profile by using futures and options contracts to lock in a price while it's high.
'It's a marketing tool that every producer has at their avail and it is way cheaper than what it should be, in my opinion, and that's to our advantage,' Kerns said.
The World Pork Expo brought more than 10,000 pork-industry producers and professionals from around the world to the Iowa State Fairgrounds.
Representatives from the Chinese livestock equipment company Kunlong International said around 40% of their clients are based in the U.S. and they usually add more to the profile at the expo.
Lily Li of Kunlong International said the tariffs, as of yet, have not caused any changes in the company's relationship with American customers. Li said the company hopes to 'keep stable' from last year and maybe expand 'a little' to other countries.
Doug Gruver, an Iowa pork producer from the Sully area, said he did not feel any added pressure at the expo because of the tariffs, but said he felt more optimistic about the upcoming year than he has the past couple of years.
'With the future prices the way they are, yes,' Gruver said. 'But we'll see what Q4 brings.'
Kerns said the past couple of years the expo has seen evidence of hard times, adding that producers had seemed 'depressed' with the situation.
'This year, we're going to make money, and you're going to see more optimism,' he said of the 2025 expo.
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