With lower feed costs and fewer hogs than last year, one might expect 2009 to be a much better year for pork producers. But there is one key reason it might not. Meat demand, both in the United States and abroad, is dropping fast. The U.S. recession is having a global impact. Consumers’ willingness to buy meat, especially high-priced cuts, is falling fast.
As the graph shows, packer demand for hogs was very strong in 2003 and 2004 when the Atkins Diet was popular. Strong export demand in 2008 more than offset declining domestic demand. But it is hard to see a bright spot for meat demand in 2009.