Max Armstrong examines the three things that needs to happen in the pork industry in order for producers to make a profit.

Steve Meyer, an economist, says producers need to lower costs, lower the supply or demand needs to increase.

Meyer says a stimulus program like the USA had in 2020 and 2021 helped increase the demand but it's unlikely this year.

Exports are up 9 percent but even it continues through out 2023, it only takes 2 percent off the domestic market which isn't enough increase in demand to help the bottom line.

And lowering the cost for producers is also a problem because it depends on the weather. The cost to produce a hog is $90 and even with good weather in the USA and South America, that might only go down to $85 which is not enough for the bottom line.

Basically, producers would have to drop production by 12 percent in order for the markets to come back.

Max Armstrong's Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.