July 16, 2010

US pork prices rebound on farm

A year after pork was pounded by a combination of high feed costs, the slumping economy and concerns about the H1N1 virus, prices are at levels reached only about a dozen times in four decades.

The increases have shown up both on the farm and at the supermarket level, based on federal-government data.

Fourth-generation producer Dereke Dunkirk of Morrisonville said Monday the higher prices-markets for live hogs recently hit more than US$60 per hundredweight for only the 13th time since 1970-are welcome relief.

Though prices are expected to moderate, Dunkirk said producers are in a better mood than a year ago, when the federal government intervened to make emergency purchases intended to prop up prices that had reached their lowest in decades.

Purdue University economist Chris Hurt, who specialises in the pork industry, said hog farmers cut herds by 3% from last year's levels in response to the collapse of prices. But he said lower costs for corn and soymeal used for feed were major factors in turning a US$24-a-head loss in 2009 into a US$33-a-head profit this summer.

The recent prices are a "once in a blue moon" increase that should moderate the rest of the year, Hurt said, noting that retail pork prices will continue to move higher this summer and will slow pork consumption.
 

Hurt's analysis said average retail prices hit a record US$3.04 a pound at the retail level in May. He predicted prices will range from US$56-59 per hundredweight this summer and US$50-53 by year's end.

Meanwhile, an outbreak of the AH1N1 virus last year also drove down pork prices, though the federal government and the industry repeatedly assured consumers there was no link between the disease and the meat.