NPPC economist Holly Cook recently provided a detailed hog market update and economic outlook during a webinar for members of the Iowa Farm Bureau Federation. Here are the key takeaways:
Improved Profit Conditions
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Economic Recovery:
Compared to 12 months ago, profit conditions for pork producers have improved significantly. Despite a challenging start in Q1 2024—with farrow-to-finish producers averaging a negative $1 per hog—strong positive returns from April to December (averaging $7 per head) have markedly improved overall profitability. -
Reduced Production Costs:
The average cost of production in 2024 decreased by 12% (or $24 per head), primarily due to lower average feed costs, helping to boost profit margins. -
Enhanced Hog Prices:
Mid-February data shows that producer-sold net hog prices increased by $10 per carcass hundred weight compared to the same week last year, while weekly net negotiated prices were up by $17.
Market and Production Trends
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Hog Slaughter and Pork Production:
Although hog slaughter is down 1.1% year-to-date, heavier carcass weights mean that overall pork production declined by less than 1%. -
USDA Forecasts for 2025:
USDA forecasts predict a 2.7% increase in pork production and a 4.0% rise in hog prices for 2025. -
Breeding and Export Records:
Despite an 8.4% decline in the breeding herd over the past five years, improvements in the number of pigs saved per litter have resulted in a record-high pig crop during the September-November period. Additionally, pork exports set new volume and value records in 2024, underscoring their importance to the industry’s overall demand. -
Robust Future Margins:
Reports from USDA’s Risk Management Agency suggest that expected gross margins for hog producers over the next six months rank as the third highest since 2011, trailing only 2014 and 2021.
Industry and Policy Developments
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Chavez-DeRemer’s Confirmation Hearing:
Former Rep. Lori Chavez-DeRemer recently had her confirmation hearing to be Labor Secretary. NPPC supports her nomination, particularly on issues such as the implementation of year-round H-2A visas, which are vital to the pork industry. -
Upcoming Testimony:
NPPC President Lori Stevermer, a pork producer from Easton, Minnesota, is set to testify before the Senate Committee on Agriculture, Nutrition, and Forestry. Her testimony will address key policies—including the new Farm Bill, measures to fix California’s Proposition 12, protections against foreign animal diseases, and funding for U.S. agricultural export promotion programs. The hearing is scheduled for Wednesday, Feb. 26, at 10:30 a.m. ET. -
National Pork Industry Forum:
The NPPC and National Pork Board will host their joint annual business meeting, the National Pork Industry Forum, from March 12-14 in Orlando, Florida. This event will include the installation of new officers, board elections, industry resolutions, and the announcement of the Lois Britt Memorial Pork Industry Scholarship and the Neil Dierks Scholarship winners.
Why It Matters
The U.S. pork industry is a cornerstone of the agricultural economy, contributing over $62 billion annually and supporting hundreds of thousands of jobs. The improved economic outlook and upcoming policy discussions are key to ensuring that producers continue to thrive while navigating regulatory challenges and market fluctuations.
For more detailed information on these developments, please refer to the full NPPC update and follow ongoing coverage on industry events and policy hearings.
