Pork production is lower than was expected. Last year the drought negatively affected hog farmers because it significantly increased the price of feed costs. Some experts predicted this was just occurring for a short time and they believed the market would experience a comeback.
There is another factor contributing to the decline in pork production. According to the Agriculture website, last year the volume of pork exports represented 23% of total U.S. production. The first issue came about when Russia banned imports of U.S. pork due to their concerns over U.S. ractopamine. They were our 6th largest buyer of U.S. pork and in 2012 represented 1.2% of pork revenue. China than decided they were going to crack down on checking pork products that were imported from the U.S. for ractopamine. In 2012, China represented 3.4% of U.S. pork revenue. Japan is the U.S. largest pork buyer; last year they purchased 6% of U.S. production. Unfortunately, their currency, the Japanese yen has lost nearly 12% of its value which is making it difficult to purchase large quantities of U.S. pork.
Smithfield Foods is one of the United States largest pork producers. The company is proud of their southern mentality and their long lasting career in the pork producing business.
In 2012, when other pork producers were nervous about the increasing feed costs, Smithfield decided to take advantage of the situation and invest early. The company is at the top of the Successful Farming/Agriculture.com website. While 2013, appears to be starting out poorly for those in the pork industry, Smithfield seems to know what they are doing and do not appear nervous about declining sales.
