Consumer demand for pork is softening slightly, according to Dr. Lee Schulz, Chief Economist for Livestock at Ever.Ag. While prices at the meat counter remain high, inflation-adjusted per capita pork consumption has declined—down 3% in early 2025 compared to the same period in 2024. That means fewer dollars moving through the system, even as prices inch upward.
Exports tell a similar story. After record-setting performance in 2024, pork exports started 2025 with a 14% year-over-year decline in volume. USDA forecasts suggest that number may improve over the course of the year, but the question is at what price. Demand, both at home and abroad, is under pressure from economic uncertainty, shifting consumer preferences, and tighter household budgets.
Schulz notes that while consumers are sensitive to pork prices, the relationship between pork and competing proteins like beef or chicken is less direct than many assume. Price shifts in other meats don’t automatically drive pork purchases. Instead, overall consumer income, regional preferences, and product-specific dynamics play a more meaningful role in demand trends.
On the supply side, today’s pork producers are significantly more efficient than they were even a decade ago. Advances in genetics, nutrition, and management have enabled producers to increase output with fewer animals. But that efficiency hasn’t protected them from rising costs. Production expenses are roughly 30% higher today than they were in 2020. Feed costs have eased slightly, but inflation-driven increases in non-feed inputs—labor, energy, and equipment—have proven more persistent and difficult to manage.
Market Volatility, Labor Pressures, and the Importance of Flexibility
Trade disruptions, especially with China, have added volatility to already strained markets. Drops in export demand for variety meats, in particular, have weakened packer margins and contributed to lower overall drop credit values. Without full data available yet for Q2, Schulz cautions against drawing early conclusions—but early indicators point to a meaningful shift in global buying patterns.
Labor availability remains a structural challenge across the pork value chain. Schulz argues that in this case, “shortage” is the right word—wage increases alone haven’t resolved capacity gaps in processing plants. Some of the recent balance in labor supply has come not from workforce growth but from a reduction in excess processing capacity. Programs that allow faster line speeds or encourage automation may help, but longer-term solutions will require investment and policy support.
Interest rates, too, are weighing heavily on producer confidence. Pork is a low-margin business, and rising borrowing costs mean producers are less likely to invest unless returns justify the added risk. As a result, the breeding herd is the smallest it’s been since 2016, with no signs of expansion on the immediate horizon.
In this environment, Schulz says, risk management tools like Livestock Risk Protection (LRP) and hedging are more critical than ever. While these tools don’t guarantee the best price, they help protect margins and bring predictability to volatile markets. He stresses the importance of flexibility: no one tool fits every scenario, and producers should be prepared to adjust their approach as market conditions change.
Technology, too, plays a growing role. As data science and machine learning evolve, producers and analysts alike must learn to filter the noise, find their comparative advantages, and make smarter, faster decisions. For Schulz, that’s what Ag Smarter really means—staying curious, embracing innovation, and building strong relationships that can weather whatever comes next.