October 2, 2006

 

Iowa's hog numebrs reaches its highest in 51 years

 

 

Despite raising the largest number of hogs in 51 years, Iowa hog producers appear headed for a record number of consecutive months of profit.

 

The USDA's quarterly hogs and pigs report released Friday said Sep 1 there were 16.9 million hogs and pigs on Iowa farms, an increase of about 2 percent from a year ago.

 

The USDA said that the figure is the largest since 1955, when there were 17.2 million hogs in the state.

 

There were 62.7 million hogs on US farms on Sep 1, the USDA report said, a 1-percent increase from a year ago.

 

Despite the figure, analysts said they expect hog operations to stay profitable at least through Jun 2007, which would set a new record for consecutive months of profitability. Hog operations have been profitable for the last 32 months.

 

Farrow-to-finish hog producers in Iowa have had a profitable 10 years, Iowa State statistics show, with average returns for the last 10 years of US$2.50 for each hog sold.

 

Shane Ellis, Iowa State Extension economist, said hog profits in the fourth quarter would not be as high as they have been in the previous three months, but should stay profitable through to June next year as long as prices of corn and feeder pigs do not rise significantly. 

 

Despite such favourable indicators, hog producers have not shown much interest in expanding their operations, Glenn Grimes, Extension livestock marketing economist at the University of Missouri in Columbia, said.

 

One reason may be the forbidding cost of new facilities and the cumbersome process of getting new permits. There is also opposition from residents near pig farms, whose calls have become increasingly vocal in recent years.

 

While large producers are expanding, many small producers are exiting the industry, offsetting the growth of the larger producers, Grimes said.

 

In fact, much of the increase in pork production in recent years has been due to exports.

 

Len Steiner, president of Steiner & Co. in Manchester, N.H would agree.

 

The weakening of the dollar against the Euro, Steiner said, has made US pork prices more competitive.

 

If exports continue to grow, it would have been supportive to prices, he said.

 

Also, as cuts in poultry production set in, poultry prices would rise and pose less competition for pork, he said.