Expectations are what we think will happen. Reality is what actually occurs. Forecasters hope these two will match. Often, they do not.

As time passes, variables that drive production and consumption change. Changes in either supply or demand can move prices. The earlier a forecaster can identify changes, and adjust, the better and the more reliable forecasts become.

Savvy forecasters are rarely shocked by anything. They do not make knee-jerk changes to their predictions.

Even though reality may prove predictions wrong, the act of forecasting has value in itself. Envisioning the future helps develop a plan. A well-thought-out plan can be a path to success. The earlier you develop a plan, the better.

Unfortunately, the farther into the future you look, the less reliable forecasts are. That’s why considering alternative scenarios can pay off.

Pork production in 2024 tops earlier forecasts, lower than recent forecasts

On May 12, 2023, USDA released its first forecast of 2024 pork supply and use in its monthly World Agricultural Supply and Demand Estimates. That report projected total supply for 2024 at 29.065 billion pounds. This included beginning stocks of 545 million pounds, total production of 27.365 billion pounds and imports of 1.155 billion pounds.

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USDA’s May 12, 2023 WASDE report forecast 2024 pork production down 0.1% compared to 2023. Fast forward 18 months, USDA’s November 8, 2024 WASDE forecast 2024 pork production up 2.0% from 2023 (Figure 1).

Why? The number of sows farrowing has been larger than expected. Litter rate growth has been above trend. Carcass weights are tipping the scales heavier. All boost pork production. On the other hand, pork exports significantly outpacing earlier projections kept domestic supplies from being even larger.

USDA did lower projected fourth quarter 2024 pork production. From the Oct. 11, 2024 to Nov. 8, 2024 they removed 90 million pounds of pork or 1.2% of production. However, it may not be enough. Fourth quarter 2024 production is still forecast up 1.8% compared to fourth-quarter 2023 and pork production for the year is forecast up 2.0%. Slaughter pace to date has been lower. Since the week ending Oct. 5, federally inspected hog slaughter is down 0.05% compared to the same period in 2023. So far in 2024, hog slaughter is up 1.0% compared to the first 45 weeks in 2023. Expect further adjustments in the next WASDE report released on Dec. 10.

While 2024 pork production and supply have exceeded early forecasts, prices have been mixed. In May 2023, USDA forecast first-quarter 2024 barrow and gilt prices (national base, live equivalent 51-52% lean) at $60 per live hundredweight. Using 75% for a dressing percentage equates to $80 per carcass cwt. This would have been $6.89 per cwt, or 9.4%, higher than in the first quarter of 2023.

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In actuality, first-quarter 2024 prices averaged $73.29 per cwt (Figure 2). This was only $0.19 per cwt, or 0.3%, higher than 2023’s first quarter. Second-quarter 2024 prices were 3.6% lower than what was originally forecast in July 2023 but 15.6% higher than in the second quarter of 2023. Third-quarter 2024 prices were 2.0% lower than what was originally forecast in October 2023 and 8.0% lower than in the third quarter of 2023. Currently fourth-quarter 2024 prices are forecast at $80 per cwt which is the highest forecast for this time period and up $6.67 per cwt, or 9.1%, from last month’s fourth-quarter 2024 forecast. This price is 12.0% higher than in the fourth quarter of 2023.

Overall, 2024 barrow and gilt prices are expected to be $3.28 per cwt, or 4.2%, higher than in 2023. Selling more production at higher prices signifies stronger demand.

What’s the outlook for 2025?

On May 10, 2024 USDA released its first forecast for 2025. They have the same production forecast in the Nov. 8, 2024 WASDE. Pork production is projected at 28.415 billion pounds, up 1.9% from the current 2024 forecast of 27.873 billion pounds. Pork exports are expected to be 7.355 billion pounds, which would be up 2.8% from 2024’s forecast of 7.153 billion pounds.

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Higher forecasted pork supply in 2025 will boost domestic per capita pork use to 51.0 pounds per person on a retail-weight basis. This would be up 0.5 pounds, or 1.0%, from 2024. USDA is expecting 2025 barrow and gilt prices, on a carcass weight basis, to fall to $78.67 per cwt, down 3.4% from the current forecast for 2024 of $81.40 per cwt.

Expect more changes

These forecasts are not set in stone. Forecasts rely on historical relationships and consider current conditions, existing laws, regulations and policies, normal weather patterns and underlying trends. All of those drivers can, and do, change from one forecast month to the next. Supply or demand shocks can appear unexpectedly at any time. Uncertainty in global markets makes pork exports and imports particularly difficult to forecast.

Pork supply, use and price projections for both 2024 and 2025 will change. USDA reforecasts each month to reflect new information and changing conditions. Producers should measure USDA forecasting success by how well USDA forecasts adjust to reflect changing market fundamentals, not by whether USDA's early forecasts achieve 100% accuracy in forecasting what actually occurs.