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Pork industry makes market stability a 2016 priority

Increased pork supply means lower prices, tight profit margins for producers.

While some of the 2015 U.S. pork industry challenges have been resolved, 2016 is bringing a new set of challenges, according to the National Pork Board (NPB). From an economic standpoint, a robust pork supply has lowered pork prices and sent producer profit margins into the red. Additionally, antibiotic use in livestock production remains a key issue.

Derrick Sleezer, NPB president and pork producer from Cherokee, Iowa, said the industry knew there was more product coming, but the market stayed really robust up until the fourth quarter of 2015. Now, however, he said it has moved into a more challenging time.

“We put in a lot of effort at the Pork Board to make sure that we are continuing to move domestic demand as well as the export markets,” Sleezer said.

There were a lot of challenges in 2015, he said, including the West Coast port slowdown, a stronger U.S. dollar and then more product on the market from the European Union after Russia stopped shipments.

NPB has been working with the U.S. Meat Export Federation to continue to move product and push export demand. In fact, Sleezer said NPB plans to spend approximately $6 million in export markets to make sure it is promoting U.S. product, particularly in Japan, Korea and China, now that plants are getting relisted.

In terms of domestic demand, Sleezer said it has been good but added that it’s just hard to get the domestic market to react to the additional product.

“The domestic market doesn’t like to move prices quickly or drastically,” he explained. “The marketplace likes to keep it pretty consistent, so even though we might be having a lower cutout value, it doesn’t show up in retail really quickly. As well as when the price goes up, it doesn’t go up as quickly in the retail market, either.”

Priorities for 2016

One of the big priorities in 2016 is still antibiotics, Sleezer said.

“We need to be able to have that tool to use to make sure we keep our animals healthy. We understand that sick animals still need to be treated.”

Making sure the pork industry can provide the right information on antibiotics to both producers and the public is the foremost thought for NPB, Sleezer said.

An additional 2016 priority for NPB is to try to keep prices as high as possible through marketings in domestic markets, as well as to keep the export markets open and moving product.

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