According to the USDA's Livestock, Dairy and Poultry report, significantly higher feed costs from reduced expectations for U.S. feed grain production as a result of drought and persistent, high temperatures in Mid-western States will all but certainly have a negative impact on U.S. pork production next year.

With 2013 USDA forecast prices for corn at $7.50-$8.90 per bushel, and 48 48-percent soybean meal at $460-$490 per ton, the spread between estimated costs of feed and hog prices is negative. Persistent negative feeding spreads suggest that most producers, unable to cover variable costs of production, would exercise some means of reducing hog production to limit operating losses.

USDA is forecasting 2013 pork production at almost 23 billion pounds, about 1.3 percent lower than estimated production this year. Lower 2013 production levels are expected to be achieved primarily through a combination of lower farrowings— from reduced breeding inventory numbers—and lower slaughter weights.

Hog prices in 2013 are expected to reflect lower available animal supplies. Prices of live equivalent 51-52 percent lean hogs are expected to average $62-$67 per cwt in 2013, almost 3 percent above prices this year.

Projected pork production levels for 2013 would reduce per capita pork consumption to 45.2 pounds per person, down more than 1 percent from forecast 2012 per capita consumption. When lower per capita estimates for pork, beef, and poultry are combined, U.S. per capita meat and poultry consumption is expected to decline next year to 197.7 pounds per person, 2.5 percent lower than 2012.

This would be the first time since 1990 that total meat and poultry consumption per capita has dropped below 200 pounds per year. Retail pork prices next year are expected to reflect lower pork supplies, and to average about $3.50 per pound.