April 10, 2008

US hog industry bruised by high feed costs

Hog farmers are preparing for a harsh year ahead, according to Purdue University agriculture economist Chris Hurt.

The US hog industry is suffering from high feed costs, which is partly caused by a popularity in ethanol production and crop exports.

Feed accounts for about two-thirds of hog production costs. The price of corn, which is a main feed ingredient for hogs and also used for ethanol, has shot up by 64 percent to US$5.8 per bushel last week from US$3.5 per bushel a year ago.

Soymeal, another important feed ingredient, also leapt from US$204 to US$329 per tonne.

Higher feed costs in addition to a situation of oversupply, prices paid to hog farmers have dropped by 18 percent in the past year.