Producers Advised to Monitor Feed Costs Closely

by 5m Editor
5 April 2012, at 7:47am

US & CANADA - A US-based agricultural economist is advising North American pork producers to keep a close watch on production costs, writes Bruce Cochrane.

Dr Ron Plain, an agricultural economics professor with the University of Missouri, says one of the amazing things is just how volatile cost of production has become.

Dr Ron Plain-University of Missouri

A decade ago we had corn prices in the States stuck around two dollars per bushel give or take.

Lately we've been above six dollars a bushel.

There's a lot more feed price risk than we used to have in the hog business so producers on both sides of the border need to pay a lot of attention to that.

Then of course hog prices, a lot of volatility there and certainly always has been a lot of price risk on what producers are going to be able to sell their hogs at.

Exports are a big part of the markets for U.S. producers as it is the same for Canadian hog producers.

How the world economy goes, the Pacific Rim has been a strong growth market for pork exports from North America in the last few years.

If they continue to do well in the economies of Japan and Korea and China then there's a good chance that export demand will be strong.

That's good for hog producers and of course the domestic markets, how the economy goes here in the United States and Canada, that's the biggest market for North American meat and so whether we're going to see some better economic growth or a softening of growth is going to also impact on the bottom line for producers.

Dr Plain acknowledges USDA expects 95 million acres of corn to be planted in the US this year, the most since 1930s, and if that comes through then we might see a bit of a decline in feed costs.

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