Study: U.S. pork industry expands in response to rising global demand
The impending increase in demand for hog supplies will create favorable terms for producers.
Strong profitability and rising global demand create a strong incentive for U.S. pork processors to expand capacity. The impending increase in demand for hog supplies will create favorable terms for producers, while intensified competition among processors could lead to a short-term compression in packer margins, according to a new report from CoBank, Denver, Colo.
"U.S. pork packing capacity will increase 8-10% percent by mid-2019, when five processing facility construction projects are complete and fully operational," says Trevor Amen, an economist with CoBank who specializes in animal protein. "Hog production is expected to increase 2-4% percent in both 2017 and 2018 to meet the demand for more supplies, with the bulk of the increased production coming from small to mid-size pork producers in the Midwest."