By the year 2028, what’s likely to be the situation for the U.S. livestock sector? According to the USDA’s latest 10-year projections, the industry will see larger hogs, larger cattle and larger chickens, as well as increased production of pork, beef and chicken.
“Pork production is expected to edge past beef production at just over 30 billion pounds by the end of the projection period,” says David Stallings, USDA Outlook Board analyst.
Increasing corn prices and lower pork prices in the first half of the decade will lower the hog feed price ratio (hog price/corn price), creating incentives to decrease farrowings. However, increased slaughter weights and the continued commercialization of the industry will continue the upward trend in pork production, according to the USDA long-term projections published earlier this month.
Pork production is expected to continue to grow along with per capita pork disappearance in 2019. Disappearance is expected to stabilize between 53 and 54 pounds per capita for the remainder of the decade. Throughout the projection period, pork exports continue to dominate imports, and pork production gains are expected to be sufficient to accommodate both the widening trade surplus as well as increased domestic demand.
According to Stallings, the projected 2028 prices for hogs will average around $44.20 per hundredweight, which is $2.30 higher than what’s forecast for this year and $1.70 less than last year’s average price.
U.S. pork exports are projected to grow faster than beef exports and on par with poultry exports. Production efficiency gains in the hog sector continue to enhance the sector’s international competitiveness. The United States is expected to maintain its position as the second largest exporter of pork behind the European Union while exporting more than twice the third largest exporter, Canada. Over the next decade, the EU is expected to increase its market share as the United States’ and Canada’s market shares are expected to decline.
While the analysts making these projections assume no disruptions in industry or current trade situations, and farm programs would remain the same for whole 10 years, Stallings says “we know that is probably not going to happen.”
The projections in the report were prepared July 2018 through February 2019 and the report was released on March 13.