Talent in the GreenSeam: Now is a challenging time for pork production

The last two years have not been easy on meat. Pork has had a harder time bouncing back in the post-covid market than its beef and poultry counterparts. The price of pork finished 2022 at just over $5.00 per pound, more than a 30 percent increase since the beginning of 2020. As consumers opt out of pork in favor of cheaper proteins, producers face the challenge of repositioning in a hostile market.

In GreenSeam’s 2023 State of Ag survey, more than 300 respondents — all with connections to agriculture — were asked to select four issues that most affect their business’ ability to grow. Out of the 11 issues presented, consumer demand took third place, following talent and public policy. Optimistic respondents recognized the opportunity to “capitalize on the market for local foods as people want to know where their food comes from.” (Complete results of the survey can be found at www.greenseam.org/stateofag.)

Unfortunately, consumer demand can also present the threat of not meeting supply.

Exporting more pork could alleviate the surplus. Jason Ward is a market analyst and managing director for North Star Commodity in downtown Minneapolis. He spoke at the BankIn Minnesota Ag Conference in Mankato this past June. “Pork producers are experiencing losses of $15 to $28 per pig. We need help in this sector that can only come from cheaper prices. I am hopeful China will start importing more pork.”

Ward forecasts exports should see a rise by late fall, ebbing the oversupply and minimizing the need for producers to scale down.

Pork is not the only consumer good that has seen historically high prices in the last three years of Covid-related supply chain issues and runaway inflation; but many suspect there is more at work with pork prices. “Larger members of the pork supply chain are artificially inflating the price of pork”, says James Gordon, market president for Pioneer Bank in Mapleton.

Last September, the federal court in Minneapolis approved two major consumer class price-fixing settlements against JBS and Smithfield Foods — two of the largest pork producers in the country — totaling 95 million dollars.

Large producers do not likely bear full fault for price hikes as companies like Tyson and Smithfield have had to significantly downsize their pork operations since 2022 (according to the Wall Street Journal). The impact of high input costs and decreased demand have made a significant local impact with the Hylife Foods pork plant closure in Windom, Minn. in April of this year.

Small producers are forced to scale up cut costs wherever possible. Jace Vetter, a hog farmer in Kasota, Minn., is faced with repositioning his farm to keep up with production cost increases. “We probably won’t be farrowing for much longer because it’s not feasible. Large operations have more sows than the number of finishers we put out in a year. We plan to add a few barns and focus on just finishers.”

Consumer demand for pork has dipped while prices continue to soar. For a silver lining, prices are expected to roll off in 2023 and producers can look forward to increased exports to China by late fall. The losses sustained on each pig will likely lead to some restructuring in the industry — including downsizing and specializing. In the meantime, the best thing for everyone to do is eat more pork and continue supporting pork producers.

GreenSeam believes that working together as an agricultural community helps us better navigate the challenges in our industry and attract more people to consider careers in agriculture, food and natural resources. GreenSeam Economic Development Coordinator Holly Callaghan can be reached via email at hcallaghan@greenseam.org.

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