At the World Pork Expo in Des Moines, Iowa, Radio Oklahoma Ag Network Intern, Maci Carter, had the opportunity to visit with Holly Cook, staff economist at National Pork Producers Council. Cook talked with Carter, covering the profitability challenges in the pork industry, trade markets, labor issues, and more.
“It’s a very challenging time in the pork industry,” Cook said. “Right now, in terms of profitability, we have prices that are about 20 percent below where they were a year ago, due to some changes in demand, and at the same time, we have record high production costs.”
Cook said production is only getting more expensive, and with the average prices producers are receiving, it is understandably a hard time in the industry.
“We’ve seen just a very slight increase in pork production this year, about .6 percent increase year to date,” Cook said. “We’ve seen demand soften from where it was before, which has led to a lower price for our animals. And as I mentioned, we’ve seen inflation take a toll on producers as well.”
Cook said the factors that placed the pork market in this position are the increases in the cost of production and softening in demand from consumers. Cook added this has led to the most negative profit margins the pork industry has seen in the last 20 years.
“Exports are a critical component of total pork demand in the U.S.; they account for about a quarter of our production,” Cook said. “So far this year, we’ve seen exports serve as sort of a bright spot. We’re up about 9 percent year to date in terms of export volumes, and that equates to about 155,000 U.S. jobs. So, the existence of pork exports is very important to our industry.”
Cook said while there are some large challenges in the industry currently, exports are still looking great.
“We’ve seen positive increases in our top markets, including Mexico, the Dominican Republic, and a lot of other markets as well,” Cook said. “And so we’ve also seen growth in those pork variety meat exports, which are up more than 40 percent this year.
With some export numbers coming out earlier that day, Cook said that we have exported more than two billion dollars worth of pork and created some great revenue from exporting the parts of the hogs that aren’t as widely consumed in the U.S.
“One thing I would highlight is the labor issue that we continue to face in the pork industry,” Cook said. “We continue to see the wage offerings in our industry increased while we struggled to find workers. So, I just really can’t understate the importance of a solution on labor and how that may be able to come through agricultural visa reform.”
Cook said the labor struggle is not a new battle, however, it is one that still needs a solution. Cook also emphasized how badly the labor issue needs to be resolved for the pork industry.
