A U.S. based agricultural economist is advising pork producers to keep a close watch on feed costs and to stay ahead of their feed requirements heading toward the 2011 planting season.
After four months of losing money U.S. pork producers are back in the black thanks to near record live hog prices however record high feed costs have also pushed the cost of production to record levels.
Dr. Ron Plain, an agricultural economics professor with the University of Missouri, expects to see corn prices moving even higher in the coming weeks.
We’re likely to have the highest feed bill per hog ever I think here in 2011 and we’re headed into the growing season and you can get a lot of price volatility depending on how the weather shapes up.
I’ve been advising producers to try to stay bought ahead on feed.
This isn’t a situation or a time of year when it’s good to be buying hand to mouth on feed.
The other thing of course is on the hog price side of it and how strong demand is going to continue to be.
If the U.S. economy continues to pick up then we’re likely to see some strong pork demand.
Any signs of weakening in the U.S. economy is going to be negative for hog prices.
Finally exchange rates.
One of the things that allowed us to be so strong last year on pork exports and expect to be close to record levels this year is the fact that the U.S. dollar is relatively weak against a lot of other currencies, not just the Canadian dollar but also against the Japanese yen and some of our other major foreign buyers of U.S. pork.
Dr. Plain acknowledges things are looking fairly good as far as a very tight meat supply and strong hog prices but livestock producers on both sides of the border need to be aware there’s a lot of price risk and anything they can do to reduce their risk would be a good idea tight now.
Source: Farmscape.Ca
