Double-Digit Growth Expected for Pork Prices Next Year

WASHINGTON, DC – After having their supply chains stretched thin due to the COVID-19 pandemic, pork producers are beginning to recover. On April 1, 2020, the sector was operating at or near full capacity but within one week (April 6, 2020) the industry was in trouble with a plant closure in Iowa and numerous plant slowdowns across the country. The supply chain hit rock-bottom on April 29, 2020 as capacity utilization fell below 54 percent. Though the industry is recovering, the Economic Research Service suggests the likely scenario for the rest of 2020 will keep output at least 1 percent below 2019 as most plants will be regulated to run under full capacity. Next year, however, the ERS expects commercial pork production to accelerate to 28.2 billion pounds, almost a 2 percentage point increase over this year. Hog prices are expected to fall almost 12 percent from 2019 to an average of $42.40 per hundredweight (cwt). Higher hog prices are expected for most of 2021 ($46.75) as producers can expect a 10 percent increase above 2020 prices.
(SOURCE: Economic Research Service)