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Feed, Pork Supply Expected to Improve Hog Profitability

10 January 2014, at 9:26am

US - A University of Missouri agricultural economics professor predicts lower feed costs and stable pork supplies will mean improved profits for hog producers this year.

During 2013 the price of corn in the US fell from close to seven dollars per bushel at the start of the year to about four dollars per bushel by the end of the year.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, says as feed costs declined the cost of production went down and producers went from losing money in the first half to making money in the second half.

Dr Ron Plain-University of Missouri :

Hog producers are set up to probably make some fairly good money here in 2014.

We're anticipating that feed costs are going to stay down and we expect meat production to not change much this year in total so we're looking for hog prices close to year ago levels.

With respect to profitability, history says when hog farmers make money they tend to save gilts and expand the breeding herd.

That's probably going to happen.

USDA's December inventory report found that producers expect to farrow about 1.3 per cent more sows in the first half of 2014 than a year ago and I think that's been driven by lower feed costs and a return to profitability but the other big issue, the PED virus and what it's likely to do to our herd.

We've had a number of farms break with the disease and death loss is very high in baby pigs so even though we've got farrowing trending upwards we're expecting the number of pigs produced in the United States in the coming year to be very close to what we had in 2013.

Dr Plain says, with good profit margins expected in the coming year, if you can keep your pigs healthy and growing well 2014 could be a profitable year.

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