U.S. pork producers have received many encouraging reports recently extolling the success of pork exports which are on a record-setting pace in 2011. In August for example, U.S. pork exports reached their second-highest value total of all time at $531 million, according to the U.S. Meat Export Federation.

But how is domestic demand stacking up?

With approximately 20 percent of U.S. pork production going to foreign markets, that leaves about 80 percent of production available for consumers stateside.  Their purchases play a crucial role in maintaining strong hog prices.

“The biggest factor in hog prices is domestic demand,” says Ron Plain, agricultural economist, University of Missouri Extension. According to Plain, the condition of the U.S. economy is likely the most important factor influencing domestic pork demand.

“If (the country) can generate some growth and push unemployment below 9 percent, meat demand goes up,” Plain says.  “Americans like to eat meat and we eat more when we have money in our pocket. The economy drives overall meat demand.”

If the country slides back into recession, which Plain concedes is still a possibility, it would have a negative effect on pork consumption. However, production of competing meats such as beef and chicken, are forecast by USDA to decline in 2012 which may benefit pork consumption. “The (USDA) numbers indicate a sharp drop in beef production, down almost 5 percent compared to this year,” Plain says.

With lower beef production going forward, more consumers may turn to pork to fill in the gap. In addition, USDA figures indicate a nearly 1 percent drop in poultry production.

U.S. pork producers stand ready to make up for the expected shortfall in beef and poultry  production. Plain expects U.S. pork production to be up 1 percent to 2 percent in 2012.