Economic Update Analyzes Pork Industry Issues and Dynamics

WASHINGTON, D.C., — The National Pork Producers Council (NPPC) released its third quarter pork industry economic update to provide a snapshot of top pork industry issues, current trends, and marketing conditions impacting U.S. pig farmers.

Key takeaways from the Q3 update include:

• California Proposition 12 creates significant challenges and market uncertainty for pig farmers across the country and has far-reaching implications beyond the pork industry.
• Persistently high production costs continue to be a major challenge to pig farmers’ profitability. Average cost and breakeven levels are 9% higher than one year ago and have increased 60% over three years.
• So far this year, negotiated hog and pork cutout values, on average, have been about 20% below the same week last year. Prices have gained seasonal momentum over the past three months but remain below year-ago levels.
• Hog slaughter and pork production increased an estimated 1.2% and 0.3% respectively through mid-July 2023. USDA is now projecting a 1.4% increase in pork production this year, while domestic pork availability is expected to drop 2.5% to 49.8 pounds per capita for 2023.
• Inflation has cooled to 3.1%, though the prices of many consumer necessities like food and housing continue to increase more rapidly than the pre-pandemic average. Inflation, rising interest rates, and other macro–level factors may continue to strain consumer purchasing power, which impacts demand for meat and pork.

“The U.S. pork industry is incredibly important not only to agriculture but to the entire U.S. economy,” said Scott Hays, NPPC president and pork producer from Missouri. “As producers face an unprecedented economic environment caused by dynamic market conditions and exacerbated further by California Proposition 12, our industry is incredibly resilient as demonstrated by generations of farm families who continue to take pride in producing affordable, nutritious protein for consumers.”

To download the report, visit NPPC’s pork industry economic update page.

Listen to NPPC Economist Holly Cook discuss the report.

Timeline & Status

• June 21, 2023: Superior Court Order of modifying California Proposition 12 implementation.
• May 31, 2023:  California Department of Food and Agriculture (CDFA) Animal Care Program releases guidance: Questions and Answers Related to Pork Sales in the Wake of the 2023 Supreme Court Decision
• May 11, 2023: The Supreme Court upheld California Proposition 12.
• October 11, 2022:  The Supreme Court heard oral arguments.
• September 2022: NPPC/AFBF file SCOTUS Reply Brief to Petitioners. The same day, California’s Department of Food and Agriculture announced it finally completed the Proposition 12 implementation rules (over three years after the original statutory deadline).
• July 2022: Amicus Briefs filed in support of the NPPC/AFBF case to review California Prop 12. The Biden administration, international trading partners and business groups representing the full scope of the U.S. economy filed amicus briefs in support of the National Pork Producers Council’s case.
• June 2022: NPPC/AFBF filed a joint brief arguing Proposition 12 violates the U.S. Constitution’s commerce clause, which restricts states from regulating commerce outside their borders.
• March 2022: The U.S. Supreme Court agreed to hear the legal challenge filed by NPPC/AFBF against California Proposition 12. Arguments will take place in the fall of 2022, with a decision expected in early 2023.
• January 2022: A state superior court granted a delay in the effective date of Prop. 12 for 180 days after final implementing regulations are issued. California has not issued final regulations, nearly 3 years after the deadline.
• December 2018:  NPPC and American Farm Bureau Federation (AFBF) filed a legal challenge to Proposition 12, asking the court to strike it as invalid under the Commerce Clause of the U.S. Constitution.
• November 2018: California voters passed the Proposition 12 which imposes arbitrary minimum requirements on farmers to provide more space for egg laying hens, breeding sows, and calves raised for veal.

California Proposition 12

• Fact Sheets
• The Latest
• Timeline & Status
• Background
• NPPC’s Position
• Resource