From giant processors to the farmers who supply them, they are in a predicament largely of their own making. They made production so efficient that demand can’t keep up with supply. U.S. demand for pork is 9% less than what it was 20 years ago, but farmers produce 25% more.
The rise of industrial-scale hog farms, steadily increasing crop yields and growing overseas demand helped supercharge the U.S. pork industry in the late 20th century, and since the 1980s, pork production in the U.S. has doubled. The industry will produce nearly 28 billion pounds of pork this year, cleaved from roughly 125 million hogs.
Pork contributes $57 billion to the U.S. economy and employs 610,000 people. In Iowa, the top pork-producing state, hogs outnumber people nearly 8 to 1. That zeal for efficiency and expansion are a factor in the current troubles. Practically everything that goes into raising hogs is now significantly more expensive: machinery, services, equipment, repairs, building materials, livestock-feed supplements and labor.
In the 1960s and early ’70s, beef was king among American consumers and pork held second place, but chicken overtook pork in 1986 as poultry production skyrocketed, making it the cheapest of the big three meats. By 1993, chicken became the most-eaten meat in America. Religious prohibitions in Judaism and Islam limit pork’s popularity, along with a sense among some that pigs are too smart to slaughter. On the other hand, some consumers are more passionate about their love for bacon than any other meat.
So American pork producers increasingly bank on consumers in other countries. The industry exports 25% to 30% of product. Sales to China, the world’s top pork-eating nation, surged following a hog-disease outbreak in the country in 2018. Producers in the U.S. responded by expanding capacity even further, with new processing plants in Iowa and Michigan. Chinese pork producers rebuilt their herds, however, and exports to the country have plummeted over the past two years, contributing to U.S. oversupply and pressuring meatpackers’ profits.
Classroom discussion questions:
- What options do pork producers have? (Hint: see Supp. 7 in your Heizer/Render/Munson text on page 308)
- How has technology played a role in the imbalance?
It’s the highest finish for the Las Vegas-based no-frills airline. The smallest carrier in the rankings scored well in the categories of (1) fewest mishandled bags, (2) fewest cancellations and (3) fewest passengers involuntarily denied boarding.
When Ural Airlines Flight 1383 to Siberia suffered a technical fault with its hydraulics a few months ago, the pilots decided to divert to a closer airport. Then they discovered the defect meant the aircraft was rapidly running out of fuel and needed to land quickly. The plane, with 165 people onboard, eventually made a successful emergency landing in a farm in southern Russia. The Airbus A320 jet remains there, fenced in and under security, with Ural agreeing to pay rent for a year to the land’s owner–and then harvesting the jet for parts.
In the Red Sea, Houthi rebels have stormed onto cargo ships, causing freight rates to quadruple and setting a precedent that American vessels aren’t welcome across one of the world’s most vital transport lanes.
Prof. Howard Weiss developed the Excel OM and POM software that we provide free with our text.
Remediation 
Prof. Misty Blessley, at Temple University, shares her insights with our readers monthly.
The shift marks a return to the “just-in-time” inventory management strategy (our topic in Chapter 16) that many companies had employed before pandemic-driven product shortages and volatile shifts in consumer demand prompted a switch to a “just-in-case” stockpiling approach. Companies are now better able to predict shopper demand and feel they can hold leaner inventories amid moderating spending growth and fewer supply-chain disruptions. They prefer not to hold large inventories because the excess stock ties up capital, requires more space and people to manage it, and runs the risk of becoming outdated as trends change.
Shrink is now one of the most frequently discussed topics among management at Home Depot, said the firm’s CFO, having moved onto its list of top priorities two years ago. That focus hasn’t changed even though some mitigation efforts, such as locking up certain items and using live-view parking lot cameras, are in place.
“There wasn’t anybody on that property who thought we were going to open on time,” said Dick Evans, one of the park’s managers on opening day. “And opening on time was critical to the company. We were at that point in debt up to our eyeballs. We’d borrowed close to $400 million to build phase one of Walt Disney World. And within a week of the time that he came on the property, the entire perspective changed. The energy level changed. He came in there like a tornado.”
