Higher Retail Pork Prices Needed for Profitability

by 5m Editor
7 April 2011, at 11:43am

US - A US-based agricultural economist warns the price consumers pay in the grocery store for pork will need to rise for pork producers to maintain profitability

Although near record high live hog prices have brought US pork producers back into the black rising feed costs have kept a lid on profits.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, notes US exports were up last year, the USDA is forecasting exports could set a new record in 2011 and we're starting to see improvement in the US economy which will translate into stronger domestic demand and that too will be good for hog prices.

Dr Ron Plain-University of Missouri

Retail prices here in the United States in January and February, both months were the fourth highest ever.

Seasonally retail prices tend to move higher as you move on into summer.

We're expecting record high retail prices in grocery stores for pork this year.

Bacon has been an especially strong price situation for the past year or so.

Bacon's a bit of an in food right now and that's helping lift the overall value of the pork cut-out.

Seasonally we tend to get the highest hog prices here in the United States in late spring early summer so if we're going to be able to move hog prices higher for another 60 or 90 days we're going to have to push that grocery store meat case price of pork to record levels.

The key as to whether we're going to be able to sustain that or not is overall strength of the economy and one of the other key things that's helping out is beef prices in grocery stores are already at record levels so, from a competing meats standpoint, pork doesn't look over-priced at all.

Dr Plain says if the US economy picks up we're likely to see some strong demand for pork but any signs of weakening in the US economy will be negative for hog prices.