An agricultural economist with the University of Missouri warns the prospects of lower feed costs could trigger an expansion of the U.S. sow herd that would aggravate the current over-supply of pork.
A combination of lower live hog prices due to sluggish domestic and export demand for pork and continuing high feed costs has pushed most North American pork producers back into the red.
Dr. Ron Plain, an agricultural economics professor with the University of Missouri, observes contrary to seasonal trends hog prices are lower than they were a month ago and feed costs are still high.
The outlook is for a lot lower feed costs so USDA is forecasting we’re going to plant the most acres to corn here in the United States since 1937 so if the weather cooperates, and we’re off to a very good start, spring plantings are well above normal.
It’s been fairly warm and dry and if we have a good growing season we’re looking easily at a record corn crop so a guy’s got to worry about a herd expansion.
We’ve not had much growth at all in the breeding herd in North America despite record hog prices and a lot of that I attribute to the fact that feed costs have been so high and the feed grain supply so tight.
Once we start looking at much lower corn prices and more adequate feed grain supply I really worry that we’re going to start saving gilts and expand the breeding herd.
If so that’s going to mean more hogs on the market in 2013 and unless we get some better demand that could be a very tough situation.
Dr. Plain says in the short term managing feed costs will be critical.
He recommends buying hand to mouth and keeping a close watch on the weather.
