Pork production in the U.S. continues to show resilience, with August 2024 production estimates coming in at approximately 2.28 billion pounds, virtually unchanged from August 2023’s total of 2.282 billion pounds. When accounting for an extra slaughter day last year, August 2024 production effectively increased by 4.2 percent over the previous year, driven largely by higher hog weights and consistent slaughter days.
Higher Hog Weights Drive Production
Since mid-May 2024, hog weights have been a significant factor in boosting production. In August, the estimated average federally inspected (FI) dressed weight for hogs was just over 210 pounds per head, compared to 206.4 pounds in August 2023. Analysts attribute this weight increase to lower feed costs rather than a backlog of hogs waiting for slaughter. This rise in weights has had a considerable effect on production levels.
Year-Over-Year Production Increase for Q3 2024
For the third quarter of 2024, pork production is forecasted to reach about 6.8 billion pounds, which is a 4 percent increase from the same period in 2023. Despite larger production, wholesale prices have seen pressure. July-August 2024 wholesale prices averaged $99.43 per cwt, around 9 percent lower than during the same period last year. This reduction in wholesale prices has also impacted live hog prices, with third-quarter hog prices expected to average $63 per cwt, down about 9 percent from a year ago. For the full year, hog prices are projected to average $59 per cwt, slightly higher than 2023. Looking ahead to 2025, hog prices are expected to average around $58 per cwt, 3 percent lower than the forecast for 2024.
Impact of Lower Wholesale Prices
The lower wholesale pork prices have contributed to the decline in hog prices. The ongoing trend of increasing pork production has created a surplus in the market, putting pressure on wholesale prices. Hog producers are experiencing the effects, as reflected in the lower live-equivalent prices. This pressure is expected to continue into 2025 as pork prices decline to maintain competitiveness, particularly against substitute animal proteins such as beef, turkey, and broilers.
Fourth Quarter Adjustments and 2025 Outlook
The fourth-quarter pork production forecast for 2024 has been slightly reduced from 7.49 billion pounds to 7.47 billion pounds, mainly due to expectations of marginally lower average-dressed weights than previously anticipated. Production for 2025 remains unchanged pending the release of the USDA’s Quarterly Hogs and Pigs Report on September 26, 2024. This report will offer key insights into hog and pig inventories, breeding herd numbers, and farrowing intentions for the upcoming quarters.
Focus on U.S. Breeding Herd
Attention remains on the U.S. breeding herd, especially given the cumulative negative hog production returns observed in 2023 and early 2024. Increasing sow productivity due to higher litter rates may suggest a shift toward smaller breeding inventories. However, USDA data shows a notable decline in sow and boar slaughter rates since June 2024, which may indicate that producers are holding back on reducing breeding inventories.
U.S. Pork Exports Surge, Led by Mexico
July 2024 saw a significant rise in U.S. pork exports, totaling 567 million pounds. Of this, 42 percent (235 million pounds) was shipped to Mexico, underscoring Mexico’s importance as the top destination for U.S. pork. In fact, exports to Mexico were nearly three times larger than those to Japan, the second-largest buyer. The spike in exports to Mexico occurred despite challenges such as the rising peso-U.S. dollar exchange rate, which typically raises the cost of purchasing U.S. pork. These robust exports have led to an upward revision in the pork export forecast for the third quarter of 2024, with total pork exports for the year expected to reach 7.2 billion pounds, a 5.2 percent increase from 2023. Projections for 2025 remain steady, with expected exports of 7.4 billion pounds.
Conclusion
As the U.S. pork industry heads into the final quarter of 2024, higher production levels, driven by increased hog weights and steady slaughter rates, are shaping market dynamics. While lower wholesale prices are applying pressure on producers, the strong export demand—especially from Mexico—is helping to offset some of the price declines. Looking ahead, the industry will be closely monitoring the USDA’s upcoming reports for insights into breeding herd trends and farrowing intentions, both of which will play a key role in shaping the market outlook for 2025.
