America’s pig farmers produced a record-breaking number of market hogs in 2016, resulting in ample supplies of pork at the retail meat case and in restaurants. Today’s large hog supplies are being driven by both a growth in the breeding herds and increased productivity. The high level of pork production is expected to continue well into 2017, again providing record-breaking supplies of pork in the marketplace.
Pork production is cyclical, and in good times, such as in 2014 with high pork prices, many farmers built financial reserves or invested in their business by expanding production. Although slaughter capacity has been close to capacity several times this past year, the silver lining is that there are several processing facilities under construction right now, which should alleviate the large hog supplies coming into the marketplace.
But even with the new processing plants in place, pork prices are anticipated to stay a good value throughout the year due to the large supply of pork. It is important to note that U.S. pork demand remains strong. Consumer spending on pork in 2016 was up 7.6 percent over the five-year average.
Beef and chicken also contributed to the growing supplies of meat, exceeding more than 101 billion pounds of available meat in 2016. Not since the mid-1990s has meat production and supply increased so quickly.
The abundant protein supply in the marketplace is good news for retailers since meat prices should continue to fall and encourage more promotional activity. For consumers, pork is expected to continue to be a good value in the meat case in 2017, with sales and in-store promotions on both fresh and processed pork.
For many consumers, including Millennials, pork provides a powerful eating experience because of its flavor, versatility and convenience, key attributes for retailers to feature at the meat case and in print promotions this year. Pork has transcended from being a great holiday meal option to the best-kept secret for everyday meals.
Pork, and especially ham, is on trend in the marketplace and remains the No. 2 most-consumed protein in the United States. New ham research conducted by the National Pork Board shows there is growth potential for whole-ham purchases throughout the year, not just at the holidays, which would help grow the total pork sales and volume at the meat case. Smaller hams, new flavor profiles and marketing throughout the year offer untapped market opportunity.
Beyond ham, a great value position on all pork products will encourage consumers to enjoy other cuts, such as pork loins or shoulder roasts, more frequently. Retailers should continue to focus on the fresh pork category and consider featuring pork shoulders, loins and hams for the early part of 2017. These cuts will bring the best value to retailers and will help to move a significant volume of pork during a time of growing supplies. NP