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Painful Predictions for US Producers

by 5m Editor
11 January 2008, at 9:38am

US - Expansion last year in the US hog industry could come back this year to bite producers in their collective wallet.

Market analysts project losses this year for as a consequence of the large inventory of animals in US herds and escalating feed costs and expenses.

USDA's quarterly hogs and pigs report released, last month placed inventory of all hogs and pigs in the US at 65.1 million head, an increase of 4 percent compared to the previous year.

A report in agribusiness journal FarmWeek, say that breeding inventory (6.16 million head) and market hog inventory (59 million head) last month were up 1 and 5 percent, respectively, compared to December 2006 levels.

“Where are these extra hogs coming from?” asked Victor Aideyan, market analyst with Farms.com, during a teleconference hosted by the National Pork Board. “Quite a few of the numbers exceeded pre-report estimates. (The report) appears to be bearish.”

John Lawrence, Iowa State University Extension livestock economist, predicted hog prices this year could average between $55-$58 per hundredweight in the first and fourth quarters and peak between $64-$68 in the summer months.

However, over supplies of supplies and rocketing input costs are projected to put pork producers in red ink for much of this year.


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5m Editor