Hog market profitability stretches to 37th month

US - Hog producers can look forward to letting the good times roll, swine industry analysts said Friday.
calendar icon 31 March 2007
clock icon 3 minute read

The analysts said the anticipated 15 percent increase in corn acreage -if realized by actual plantings - could take some of the pressure off feed costs and continue a record run of profits for pork producers.

The U.S. Department of Agriculture's quarterly hogs and pigs report released Friday showed that, on March 1, there were 16.6 million hogs and pigs on Iowa farms, a 1 percent increase from a year ago.

Nationally, the inventory of hogs and pigs on March 1 totaled 61.1 million, up 1 percent from March 1 a year ago.

Shane Ellis, Iowa State University Extension economist, said the potential increase in corn acres this year will make for lower corn prices and lower feed costs.

"If the weather holds out, and we have a bigger corn crop, we'll see livestock producers stay profitable," Ellis said.

Iowa hog producers have made a profit on every hog sold for 37 consecutive months, Ellis said. That's the longest run of monthly hog profits in history.

One question that hangs over the market, Ellis said, is how much more of the extra corn will be available for livestock production.

"There are forecasters who say ethanol and other industrial uses will eat up the increased corn acres, but producing more corn sure isn't going to hurt," he said.

Other livestock industry analysts agreed with Ellis that the Agriculture Department planting intentions report will drive corn prices down and help reduce feed costs for hog producers.

James Mintert, Extension livestock marketing specialist at Kansas State University, said the report will lead to lower corn prices in the short-term, but actual plantings and weather hold the key to potential corn prices.

"Livestock producers in general and hog producers in particular got some good news," he said, with the higher-than-expected corn acreage estimate released by the Agriculture Department.

Source: DesMoinesRegister.com

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