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Pork industry looking for a rebound year?

USDA forecasts better year in 2020 for pork producers.

Submitted photo National Pork Board.jfif
Submitted photo / National Pork Board

The U.S. pork industry has been in expansion mode since roughly 2014. Those efforts haven't seen all the desired success yet, but 2020 could bring better days, an industry leader says.

"Global demand has been growing for years. Now we need to get some of these trade issues resolved," said Bill Even, CEO of the National Pork Board.

The pork industry's improved outlook was reflected in the 2020 Farm Income Forecast issued earlier in February by the U.S. Department of Agriculture's Economic Research Service. The forecast predicted that cash receipts from hogs will rise 18.4% from 2019 to 2020, a much larger increase than what's estimated for other major livestock groups. For example, cow/calf cash receipts are forecast to increase 2.6% from 2019 to 2020.

The forecast also estimated that most expenses will rise in 2020, which obviously would work against pork producers and others in production ag. Feed costs are projected to rise 5.8% in 2020, with labor costs increasing 5.3%, for ag producers in general.

In any case, the pork industry is going into 2020 with considerable momentum. Both the sales and volume of U.S. pork exports set record highs in 2019: 5.89 billion pounds of pork and pork products were exported in 2019, up 10% from 2019, while the dollar value of pork products rose 9% to $6.95 billion in 2019.

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Additional sales to China, reflecting that country's outbreak of African swine fever outbreak, fueled the increases, according to information from the National Pork Board.

But a drop in 2019 sales to Mexico and Japan, traditionally top markets for U.S. pork, cut into both the sales and volume of U.S. pork as America tried to work out new trade deals with the two countries, the National Pork Board said.

Recapturing lost market share is crucial to the U.S. pork industry. Selling more park across the entire fast-growing Southeast Asian is vital to the long-term success of the industry, too, Even said

The world's fast-growing middle class in Southeast Asia and elsewhere means more people with more disposable income to spend on high-quality protein such as pork, which encouraged the U.S. pork industry to expand, he said.

Even, asked by Agweek what he'd tell a U.S. pork producer in a one-on-one conversation, said, "I'd tell them to be optimistic. As I said, we just need to take care of these trade issues."

Exports account for a little more than a quarter of U.S. pork production, so domestic consumption remains essential to the industry. Domestically, things are going well, Even said,

USDA estimates 2020 U.S. per-capita pork consumption at 52.4 pounds, up from 52.4 pounds in 2019 and 50.1 pounds in 2017. A number of factors are credited for that, including the growing popularity of some foreign cruisines that heavily feature pork, according to published reports.

Under the national Pork Checkoff, which is administered by the Des Moines, Iowa-based National Pork Board, U.S. pork producers and importers pay 40 cents per $100 of value when pigs are sold and when pigs and pork products are bought into the United States. The money collected is used in promotion, research and education. It is not used for lobbying or to influence government policy.

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Recently, for example, the Pork Checkoff announced plans to help customers in Mexico develop new uses for pork loins.

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