Source: Chris Hurt, FARM DOC DAILY, UNIV. OF ILLINOIS, 7/9/18

The pork industry appears to be headed for a period of large losses in which excess pork supplies force prices below costs of production. In addition, demand will likely be weakened by reduced exports with tariffs in place on U.S. pork exports to China and Mexico. On a positive note, Chinese tariffs on U.S. grains and soybeans are helping to erode feed prices along with favorable growing season weather. The industry has expanded the breeding herd by three percent according to a recent producer survey by USDA. This is the highest rate of breeding herd expansion since this expansion phase began in 2015. A breeding herd of this magnitude is likely to be a primary contributor to excess supplies in 2018 and 2019.

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