Pork Industry Cost Pressure Raises Sustainability Questions Ahead

The pork industry is facing growing financial pressure as production costs continue to climb.

pig piglet hog pork_By didesign via Adobe Stock.png

Photo by didesign via Adobe Stock

LUBBOCK, TX (RFD News) — The U.S. pork industry may face a longer-term economic reset as high capital costs, low margins, and rising volatility pressure wean-to-finish production. International swine consultant Todd Thurman says those three forces together make the current model harder to sustain.

Thurman says wean-to-finish production costs have increased since 2002, while profit margins have narrowed. At the same time, volatility in both input costs and revenue has increased.

The industry has managed those pressures through consolidation and contract production. But Thurman says consolidation has leveled off and may be showing signs of reversing.

New contract production is also harder to justify. He estimates debt service on a new barn is now around $46 to $47 per space, while typical contract payments near $41 per space would leave producers losing money.

Thurman says risk management remains important, but current tools may not be enough unless the industry improves margins, reduces volatility, or finds a way to lower capital pressure.

Farm-Level Takeaway: Pork producers should watch construction costs, contract terms, and working capital needs before expanding wean-to-finish capacity.
Tony St. James, RFD News Markets Specialist

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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