Market Trends of united states processed pork meat Industry
Increased domestic production is driving market growth
- Globally, the United States is the third-largest pork producer. It is also the leading pork producer in the region, accounting for around 75% of the region's pork production in 2022. Pork production in the country has a substantial impact on the US economy. About 140 million market hogs are raised on the 66,000 pig farms in the United States each year, the vast majority of which are family-run, and nearly 27 billion pounds of pork are produced by the hundreds of packing facilities. Hog and pork farming supports more than 610,000 employees and more than USD 57 billion in GDP through value-added activity. Pork production is expected to expand as a result of US hog growers' greater supply of pork meat due to higher farm-level productivity.
- In 2021, more than 66,000 pork producers sold over 140 million hogs worth more than USD 28 billion in gross cash revenue. However, hog production rose from 59.11 million heads in 2000 to 74.15 million heads in December 2021, including 68.02 million market hogs and 6.12 million breeding hogs. About 93% of the hogs in the United States are raised on farms with 2,000 or more hogs, whereas only 7% are raised on farms with fewer than 2,000 animals. Family farms account for 96% of all hog farms and 80% of hog inventories in the United States.
- Despite the declining herd population, hogs slaughtered from January 2021 to May 2021 were up by 1.39 million heads or 2.6% compared to the same period the previous year. Pork production was up by as much as 3.2% to 5.3 million. However, due to the pandemic, there were numerous slaughterhouse closures or capacity restrictions in the United States.
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Inflation is expected to affect the prices of pork in the country
- In the United States, pork prices grew by 11.74% between 2017 and 2022 due to rising labor expenses across the pork supply chain, supply bottlenecks, and delays. Other issues included a 2.5% decrease in hog packing capacity as a result of a federal court decision prohibiting faster harvesting line speeds, an increase of 23.9% in total costs, a 35.5% increase in feed costs, and, most critically, a labor scarcity that hampered productivity and increased salaries.
- Pork production slightly went down by 2% in 2022. Imports grew by 20%, while exports declined by 9% in the same year. Thus, the per capita pork supply was 0.3 pounds more in 2022 than in 2021. However, the high price of pork in 2022 compared to the previous year was mainly due to the effect of inflation. In October 2022, the retail price of pork averaged USD 5.047 per pound, an increase of 23.1 cents from the previous year. In November 2021, the high average for retail pork was around USD 4.823 per pound.
- The price of pork in the country is expected to stay stable in the coming years, although the domestic supply of pork is anticipated to expand. Compared to around USD 67/cwt in 2021, the average price on a live equivalent basis was USD 71/cwt in 2022, which was anticipated to stay relatively stable at about USD 71/cwt in 2023. Domestic production was expected to increase by 1% in 2023 compared to 2022 due to the consistently rising pig harvests and higher animal weights. Due to a drop in demand from important importers like Mexico and China, US exports were projected to decline in 2023. These factors may coalesce to stability in pork prices in the next few years.
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