Prices for hogs and cattle should remain strong through the end of 2025. Lee Schulz, chief economist for Ever.Ag, said those numbers may not necessarily trigger expansion plans.
“USDA’s last report said we had the smallest hog breeding herd since 2016,” he said. “We continue to produce more pork with fewer pigs.”
Pork production was up 1.8% in 2024 and looks to be just under 1% higher in 2025. The USDA’s forecast climbs to 1.6% in 2026.
“We are seeing that largely through better productivity,” Schulz said. “We haven’t needed to expand the breeding herd yet.”
Schulz said hog producers are certainly seeing some profitability. He said the margins are the highest since 2021, and that may tempt producers to expand.
Schulz said the USDA’s July cattle inventory report said placements were lower by 8%, the lowest in years. He said the USDA’s 10-year forecast is playing out fairly accurately at the moment. It said numbers will remain lower through 2026 and should increase some in 2027. He said the forecast estimates beef production will not increase until 2028.
Therefore, prices should continue to set records that the market broke a year ago, he said, adding those prices make it very tempting to sell heifers.
Schulz said hog prices in the third quarter should average around $100 per hundredweight on a lean basis, a figure 14% higher than a year ago. Fourth-quarter prices should average $86/cwt., a 2% increase over 2024.
For the year, he said hog prices should average around $91/cwt., an 8% jump from a year ago.
On the fed-cattle side, third-quarter prices should average $217/cwt., a 15% increase from a year ago. Fourth quarter prices should be similar, with the yearly average of around $215/cwt. Schulz said that number is 15% higher than a year ago.
He said third-quarter feeder cattle prices should average $370/cwt., with fourth-quarter prices in the $365/cwt. range. For the year, Schulz said that’s an average price of $367/cwt.
He said profits were in the $500 per head range in May of 2025.
Schulz said despite those numbers, any expansion phase would probably not happen rapidly.
EDITOR’S TAKE:
Every signal we see suggests that livestock producers are doing very well financially. The downside is that consumer prices at both grocery stores and restaurants are going to continue to increase for beef and pork. Obviously, the pork herd can expand more quickly than beef when the turnarounds do happen, but that does not appear to be imminent.
You, however, can take advantage of this situation by putting livestock producers at the very top of your ag customer prospect list. Also, be sure to keep your inventory up to date on AgTruckTrader.com so they can see all the latest you have to offer.
