High profitability and growing global demand create a strong incentive for pork processors in the United States. The expected increase in demand for sows creates favorable conditions for producers, while competition between meat processors can lead to increased production capacity, according to a new report from CoBank.
Trevor Amen, an economist at CoBank, specializing in animal protein:
"The total capacity of pork processing in the US will increase by eight to ten percent by the middle of 2019, when five projects for the construction of industrial facilities will be completed and fully commissioned. The production of pigs is expected to increase by two to four percent in both 2017 and And in 2018 to meet the demand for more supplies, with most of the increase coming from pork producers in small and medium-sized businesses in the Midwest."
Currently, three new modern pork processing facilities are being built, capable of processing more than 10,000 pigs per day. Two facilities are being built in Iowa and one in Michigan. Two small factories with a daily capacity of up to 5,000 heads are repaired in Missouri and Minnesota.
"The continued global demand for pork in the US will be a decisive factor, as the market will adjust over the next two years," Amen said. "The domestic consumer demand was very strong, and we expect it to continue, but the prospects for further growth in domestic demand are limited, so export markets will have to absorb the growth in production." The access of US producers to foreign markets will be crucial to prevent the excess of domestic supply and the deterioration of profitability for both producers and processors.
Source: agroindustrial portal AgroXXI.
