October 6, 2006

US pork production to remain profitable up till next summer
 

Farmers are right to be worried about rising corn demand, since pork producers have fewer alternative feed choices than cattle ranchers who can rely on ethanol by-products to supplement their feed.

Purdue economist Chris Hurt said hog production costs may reach US$44 per hundredweight if corn is in a range of US$2.80 to US$2.90.

Hurt is forecasting hog prices to be around US$50 next summer. In that case, hog producers could be assured of at least a break-even production.

After that, there may be expansion and a change in the hog market.

Hurt also notes that corn prices are already approaching US$2.60 in the Midwest this harvest and said there would be some anxiety where those prices would be a year from now.