The pork industry appears to be headed for a period of large losses in which excess pork supplies force prices below costs of production. In addition, demand will likely be weakened by reduced exports with tariffs in place on U.S. pork exports to China and Mexico. On a positive note, Chinese tariffs on U.S. grains and soybeans are helping to erode feed prices along with favorable growing season weather. The industry has expanded the breeding herd by three percent according to a recent producer survey by USDA. This is the highest rate of breeding herd expansion since this expansion phase began in 2015. A breeding herd of this magnitude is likely to be a primary contributor to excess supplies in 2018 and 2019.The market herd was up three percent and farrowing intentions for this summer and fall were up two percent. With the breeding herd up three percent, there is concern that actual farrowings this summer and fall could be higher than the two percent increase recorded by survey respondents.Pork supplies will be large. First-half supplies this year have been up four percent and are expected to rise to five percent higher in the third quarter this summer and four percent higher in the final quarter of 2018. Current expected supplies for the first-half of 2019 are up four percent and three percent in the last-half of 2019.The second driver of the large losses facing the pork industry revolve around the current trade war the U.S. has entered.