Improved Pork Industry Profitability Expected27 February 2013
CANADA - A pork specialist with Alberta Agriculture and Rural Development says improved profitability in the pork industry is a realistic expectation as we move toward the spring grilling season, Bruce Cochrane writes.
Despite near record live hog prices in 2012 drought that hit the US during the 2012 growing season has resulted in extremely tight availability of feed for livestock throughout North America.
Ron Gietz, a pork specialist with Alberta Agriculture and Rural Development, says where as the corn price has pulled back a little bit, in Alberta the barley price and the wheat price have stayed firm all the way through.
Ron Gietz-Alberta Agriculture and Rural Development
In terms of feed costs since the summer they've increased dramatically, in the neighborhood of in rough terms from 100 to 105 dollars a head per slaughter hog finished for feed costs last simmer and that's more like 125 to 130 dollars a head just in terms of feed costs in the current market place.
Everyone that I've talked to expects these supplies to stay quite tight until we move into a new crop.
It all comes down to the US corn crop.
If we get even an average crop there, with the kind of acres and so on that we're going to see, there's very good odds of some price relief on the feed cost side.
I don't think that's necessarily a pie in the sky or overly optimistic.
I think that's a realistic view.
We've had about three sub par years, including a major drought year so we're probably due for a normal year so we'll just wait and see whether we get that or not.
Mr Gietz encourages producers to be watching for any rallies in the cash market for live hogs and see if that translates onto the futures and, if it does, seriously look at locking up some of those prices.
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