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This report examined the underlying causes of the increasing retail pork prices in the United States starting in January 2020 following COVID-19-related shutdowns. From January 2020 to April 2022, nominal retail pork prices increased 27.3%.
It was found that general macroeconomic factors and inflation were responsible for half of the increase. Supply-side factors resulting from increased production costs were also responsible for 30% of the price increase. During the period marginal costs of pork production increased approximately 45% due to factors including significantly higher feed costs and fuel and transportation costs. Lastly, increased willingness-to-pay from consumers drove 19% of realized retail pork price increases. A likely driver behind increasing pork demand is strong consumer food spending, buoyed by federal stimulus and COVID-19 relief payments.
Farm-level hog prices and wholesale pork prices are more volatile than retail pork prices, and the retail pork price increases facing consumers have increased much less than have the prices facing buyers of hogs or wholesale pork.
Economics and Market Intelligence Department 333 Latin America, from data from: Pork Checkoff/ United States/ https://porkcheckoff.org/ and Kansas State University/ United States/ https://www.k-state.edu/
