State of Economy Could Drive 2011 Live Hog Prices

CANADA - A US based agricultural economist predicts the state of the world economy and demand for pork both domestically and on the export market will play a key role in influencing live hog prices in 2011, according to Bruce Cochrane.
calendar icon 28 September 2010
clock icon 3 minute read

Last month US pork producers earned an estimated 35 dollars per head profit on live hogs compared to losses of over 40 dollars per head in August 2009.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, credits reduced North American production combined with improved domestic and export demand for pork fueled by an improved economic situation.

Dr Ron Plain-University of Missouri

We raise hogs for consumers.

What happens as far as consumer taste and preference has a big impact on hog prices.

Right now here in the United States we've had record prices for bacon and pork bellies here this summer.

Bacon seems to be an in food right now, moving lots of that product and it helped push the cutout value of US hogs to record levels.

If we can continue that strong demand that's certainly going to help the price situation.

Hams continue to be a bit of a softer price situation, not doing quite as well.

We export quite a bit of the hams we produce in the United States.

Hopefully that export demand will pick up a bit in 2011 and we'll see a little bit stronger prices there.

On the competing meats fortunately it looks like beef production is going to be down again next year so the total supply of meat on the market is going to be pretty tight I think again in 2011.

Dr Plain says if the world economy can grow then we've got quite a few more months of prosperity in the hog business but, if the economy doesn't do well, then these badly needed profits after a few years of losses could start to fade away quicker than we want them to.

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