Protein Report: Pork
The economics of pork are a bit complex heading into the back half of 2021.
On one hand, the price of pork increased 2.6% in April and is 4.8% higher from this time last year. This increase can be attributed to high feed and fuel costs, ongoing labor shortages, and consumers who are eating more pork products when dining out and cooking at home.
Meanwhile, some experts have predicted that a decline in demand in China will lead to lower prices in the U.S. marketplace.
In an article published in April, the Des Moines, Iowa-based National Pork Board broke down the supply-and-demand dynamics: “More limited domestic pork supply has pushed up prices. But pork is not alone, as prices are up for all proteins, so inflationary pressures are part of the current reality. Pork remains competitive with other proteins, as evidenced by the relative price of various pork cuts versus beef and poultry options. And while hog slaughter this fall may be slightly under 2020 levels, it will be higher than the five-year average. This suggests adequate pork supply for U.S. retailers and foodservice operators during the year-end peak demand period.”
Ozlem Worpel, of Dakota Dunes, S.D.-based Tyson Fresh Meats, agrees that the outlook is a bit murky, given the many variables affecting the pork market, such as the export situation, channel demand and freezer inventory. “There are a lot of unknowns,” Worpel admits. “We know we need more hogs and demand is high, but at the same time, we know that plants are still having labor challenges. I wish I had a crystal ball to tell you where it’s going.”