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WPE REPORT: Rising Costs Hitting Pig Industry

by 5m Editor
3 June 2009, at 7:09pm

US - Despite respectable market prices for pigs in the US, costs are crippling the US pig producer, writes ThePigSite senior editor Chris Harris.

The CEO of the NPPC, Neil Dierks, speaking at the World Pork Expo in Des Moines, said that the producers were facing extreme losses as overheads and costs continued to rise.

He said that the market prices are not falling through the floor, but the costs of feed and utilities are rising forcing many producers out of business.

He said that in 2006 prices were $63.87 per cwt carcase weight, in 2007 prices were $64.97 per cwt carcase weight and last year the prices rose to $67.18.

However, costs were $53.51 per pig in 2006, $62.72 in 2007 and $76.08 in 2008.

Mr Dierks said that producers could expect a loss of $11.16 per cwt carcase weight looking at the predicted soy and corn futures prices.

He said that the forecast three to five per cent cut in the pig herd would see it reduced by between 3-5 million and for every million pigs that are cut from the herd jobs in the industry would be reduced by 311. He forecast that more than 1,100 jobs will be loss because of the cut in the pig herd.

He said that the impact of rising costs had been felt across the industry, but the NPPC had now asked the USDA for a further $50 million in assistance to bail out the producers in the short term.