There's good news and bad news for pork producers in 2016.

U.S. hog producers are expected to market a record number of hogs this year, while a lack of processing capacity has put downward pressure on prices, said Len Steiner, Steiner Consulting Group, during a Tuesday conference call organized by the National Pork Board.

U.S. corn growers are expected to harvest a 15 billion bushel crop and corn prices are in the $3 to $3.50 per bushel range, which lowers the cost of production, but there's weaker demand for pork in emerging markets.

More than 20% of U.S. pork goes to export markets, where pork is fighting the headwinds of a strong dollar and increased competition.

U.S. hog producers are expected to market a record number of hogs this year, while a lack of processing capacity has put downward pressure on prices, said Len Steiner, Steiner Consulting Group. (Photo: darcy maulsby/Thinkstock)

When it comes to the global market, $47 per head of market hog is attributable to overseas sales, said Brett Stuart, of Global AgriTrends. In 2015, pork exports totaled more than $5 billion. U.S. pork went to 121 countries, with Mexico a key export market for U.S. pork. The Trans-Pacific Partnership would benefit U.S. pork, but it faces a tough path in national politics, he said.

Retail counter

At the retail level, history shows that price adjustments occur over time, Steiner said. Consumers don't make abrupt changes to eating patterns and retailers adjust to price changes by focusing on promotions and featuring certain meats. The food service sector changes prices even slower because menus are printed.

U.S. consumers ate 275.1 pounds of red meat and poultry in 2006. That declined after the recession to 246 pounds and it is at 259 pounds per person in 2016, the first increase in seven years, Steiner said.

Quarter four is the strongest quarter for pork sales, said Patrick Fleming, director of market intelligence and innovation for the National Pork Board. In the fourth quarter of 2015, pork sales were $3.6 billion, which accounted for 28% of the year's pork sales. Retailers are featuring hams, with promotions such as buy a ham, get a free turkey. The largest ham holiday is Christmas, Fleming said.

There's been an expansion in the size of hams available, with hams that feed four people on up to hams that feed a family of 12 gathered to celebrate. There's also been an expansion in flavors, with salted caramel being one of the newest ham flavors.

Pork is also expanding its place in food service, with pork found on 91% of entrée menus and its placement on appetizer menus is up 33%. Pork entrees are found on 42% of kids' menus.

The bacon craze is in its seventh or eighth year with consumers favoring thick cut flavored bacon, Fleming said.