But more pork processing plants are on the way. Plants are expected to be up and running in Michigan, Iowa, Minnesota and Missouri by late 2016 or 2017.
“That will make the demand higher. That will help our prices,” says PORK Network Editor JoAnn Alumbaugh.
Industry leaders also are focusing on a plan to make sure that any extra supplies of the product is consumed. “Our domestic demand is strong, but virtually flat. Even if our consumers were to consume two more pounds of pork a year, that would not compensate for the amount of pork we’re going to have on the market. So, it’s really important that our producers and our exporters focus on international markets,” says National Pork Board Vice President of International Marketing Becca Nepple.
Those are markets like China, which wasn’t a big player as recently as a year ago, but U.S. pork exports to China in April surpassed top buyer Japan for the first time. What happpened? China now has a shortage of pork products domestically from culling its own hogs as well as record high prices.
At the same time, the pork industry is keeping a close eye on factors that could affect demand.
“The concern we have is that China and Hong Kong were at 95 percent from a year ago,” Meyer says. “But the only other market that was positive was Canada. Japan was down, Mexico was down. We’re still fighting a strong dollar and we’re still fighting quite a bit of competition from the European Union.”
“Some producers have made the decision to not use ractopamine, to have access into those markets. That’s an economic decision that they need to make,” says National Pork Producers Council President John Weber. “From our position as an organization, we’re very science-based and technology based. We will continue to work with these countries and accept the use of ractopamine.”
“A major factor in growth is a relisting of those plants for China late last year. We went through most of 2015 with only four or five plants listed to be eligible to ship there. If you don’t have any plants eligible, you can’t do a whole lot of business,” says Meyer.