The National Pork Producers Council released its Q3 Economic Update. NPPC Economist Holly Cook said this report dives into the consequences of Prop 12 and other factors affecting pork prices.
“NPPC’s Quarterly Economic Update provides a snapshot of current market trends that can be a resource for producers but are also important for congressional leaders and other audiences to understand the issues impacting the pork industry,” Cook said. “In this latest report, we look at the implications of California’s Proposition 12 and dive into some of the other factors that are having a real impact on hog prices and margins right now. This includes high production costs and trends impacting pork demand, like real consumer incomes and the relative prices of other proteins. And we also look at current production levels and takeaways from the latest toxin pics report.”
Cook also talked about what impact recent price increases will have on the overall profitability outlook.
“Over the last eight months, producers have been dealing with a very challenging economic environment that has resulted in the worst average losses in about 20 years,” Cook said. “From May to July of this year, negotiated hog prices have increased by about 30 percent but are still $20 below where they were last year at this time, and production costs are higher. In the report, we look at the seasonality of hog prices as well as the factors that could help improve the profitability outlook, such as potentially lower feed costs and any improvement in consumer demand.”
Cook added that the NPPC is also exploring the implications of California’s Prop 12 in the Q3 update.
“This update helps explain why Proposition 12 creates major challenges for pork producers,” Cook said. “California represents about 12 percent of the U.S. population, and their consumption is about 10% of pork production. But because California produces 0.1 percent of U.S. pork, the burden of complying with Prop 12 will fall on farmers in other states, and the costs of construction and compliance are significant. Higher costs also mean higher prices for consumers, and it’s important to share that the Supreme Court’s decision has far-reaching implications beyond the pork industry.”
For more information, visit nppc.org.
