Challenges Persist for Hog Industry in 2024 Despite Potential Improvements

In the aftermath of a challenging 2023, hog producers may encounter slightly better conditions in 2024, but the industry continues to grapple with a tough economic landscape, according to Iowa State University Extension economist Lee Schulz.

“The headwinds of profit are still coming,” Schulz remarks, underscoring that, if current projections materialize, the industry is poised to experience its most unfavorable two-year stretch in pork producer profitability.

While 2024 appears less dire than 2023, red ink still looms over the industry. Schulz questions the likelihood of national hog herd expansion this year, leaning towards the possibility of contraction.

The latest USDA Hogs and Pigs report reveals a negligible increase in total hog and pig inventory compared to the previous year, with a notable 3.3% decline in the breeding herd—an ongoing trend. Schulz suggests this reduction might offer some market support, though he acknowledges record pig numbers per litter have sustained overall production despite the diminishing breeding stock.

Western Illinois University ag economics professor Jason Franken observes that the decline in the breeding herd exceeded expectations, while the rise in pigs per litter continues to be a prevailing trend, helping offset reductions in farrowing intentions.

Despite these dynamics, market conditions don’t currently favor aggressive expansion. Producers, having suffered substantial losses in 2023, are cautious about cutting breeding herds due to recent investments in facilities.

Schulz notes that economic conditions have persisted long enough to necessitate a pullback, emphasizing that decisions made today regarding pork production were influenced by conditions 10 to 18 months ago.

Continued contraction in the industry is anticipated in the coming months, with reductions in farrowing intentions signaling a challenging road ahead. High costs, particularly for labor and contract services, continue to burden producers.

However, Schulz suggests that a year of increased exports could bolster demand, potentially injecting optimism into the marketplace and providing support for industry expansion. The industry’s ability to navigate challenges and capitalize on export opportunities may shape its trajectory in the months to come.