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Using Futures Markets Can Improve Margins

by 5m Editor
8 December 2008, at 9:50am

US - Purdue University agricultural economist Chris Hurt says pork producers should take advantage of the chance to make money.

According to Pal-item.com, Mr. Hurt said using the futures market to sell lean hogs, while buying less costly grain, will improve margins.

"Hog producers lost a lot of money this year and we're seeing herd cutbacks in the US and Canada. In addition to herd cutbacks, the financial crisis is pushing feed costs down," Mr. Hurt said.

Consumers may eat more pork because it's lower in price, about $2.92 a pound compared to $4.31 a pound for beef, Hurt said. Corn and soybean meal prices are down, making it less costly to feed livestock.

"When you combine the lower cost of production with the smaller hog supply, pork producers should see some profitability by later winter -- February or March," Hurt said.