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Watching Pork Industry Dynamics Like…

With the 4th of July less than a week away, it’s the perfect time to do a status check on an American BBQ staple: pork.

Not so fast… The long simmering feud over pork processing line speeds will reach a crescendo as a federal judge’s order will go into effect.

Starting today, those line speeds will be capped at 1,106 hogs per hour. Research by Iowa State’s Dr. Dermot Hayes found that this change alone will reduce the U.S.’s pork processing capacity by 2.5% and lead to $80 million in lost revenue for small pork producers.

Back to the wild west? While processing speeds slow down, implementation of Prop 12 seems to be moving at breakneck pace.

The infamous California ballot measure aimed at establishing animal care requirements looks to be close to reality, and the news may not be all good for the consumer. Local supply is expected to see a 50% drop in California once the new requirements take effect. That supply shortage will lead to much higher prices.

A silver lining… maybe? Many in the industry were predicting a tough Q4, worried that the market-ready hog supply might outpace slaughter capacity. In its June report, the USDA showed a 3% drop vs. last year’s number of pigs under 120 pounds. Fewer small pigs in June means fewer to slaughter later in the year, which might keep everything buzzing along.