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'Red Ink' Remains for Hog Producers

by 5m Editor
28 April 2008, at 8:21am

DES MOINES - Farm analysts say that pig producers will continue to struggle with profitability due to low hog slaughter prices and high grain costs.

It's a trend that has already kicked in the rest of the world, but John Lawrence, Iowa State University Extension economist, says US farmers will have to accept the situation is going to be the same here in the US,

"We're looking at big-time red ink. There will be some producers who will opt out of hog production," particularly those farmers who are diversified in crops and who can sell their corn and soybeans at today's high prices," he said in a report for TH Online. Lawrence believes that Iowa hog producers can expect more losses for the rest of this year and the first quarter of 2009. Hog producers here have lost money on each hog sold for five straight months and recent reports released by the US Department of Agriculture indicate farmers are likely to slow their hog production.

Hitting the Brakes

"People are hitting the brakes pretty hard. The trajectory is for hog production to drop," he added.

James Mintert, a Kansas State University professor, said large supplies of competing meats such as beef and poultry will continue to depress hog prices.

He added that the high demand for grain and the already high prices could be a very bad situation if the US has a poor crop season.

View the TH Online story by clicking here.

5m Editor