Pork producers will struggle through this winter with market prices below the cost of production, says economist Chris Hurt of Purdue University. “Record pork production and trade disputes continue to be the near-term drag on prices,” wrote Hurt at the farmdoc Daily blog, adding that futures prices in the spring and summer “will be high enough to provide profitability.”
Hurt estimated producers will lose $12 per head this year because of trade war damage. They could see a profit of $7-$11 per head in mid-2019 if trade disputes are settled. “The bottom line is that the U.S. industry will be producing record pork supplies in 2019 and will need more open export markets and strong demand support. If not, another year of losses might result.” One-fifth of U.S. pork is sold overseas.
Meanwhile, the National Pork Producers Council said hog farmers have lost $1.5 billion in revenue because of retaliatory tariffs by Mexico on U.S. ag exports. The farm group urged the White House to remove steel and aluminum tariffs on Mexico, so Mexico would remove its 20 percent tariff on U.S. pork. Iowa State University economist Dermot Hayes, who calculated the losses on sales to Mexico, also said losses on sales to China would amount to $1 billion this year. Mexico and China account for 40 percent of U.S. pork exports.