Live Hogs Expected to Remain Profitable Through 2015

By Bruce Cochrane

An agricultural economics professor with the University of Missouri expects live hog prices to remain profitable until the end of 2015.

Although live hogs prices have fallen dramatically from their record levels this past summer, North American pork producers remain profitable.

Dr. Ron Plain, an agricultural economics professor with the University of Missouri, observes prices have fallen from $1.30 per pound on a carcass weight basis this past summer, by far the highest prices ever, to the mid $.80s in recent days, the result of increased hog slaughter and more pork on the market.

Dr. Ron Plain-University of Missouri:
Seasonally we tend to slaughter a lot more hogs in the fall than we do in the summer and that's been even more so this year.

The PED virus caused a very high level of pig death loss, baby pig loss, last winter and that reduced summer hog slaughter.

The death loss to PED was much lower this summer and so it's not depleting our pork supply near as much here in the fourth quarter of 2014 as it did back during the summer.

A lot of people are expecting a seasonal increase.
Like a lot of viruses they think PED will be more of a problem during winter months than during summer months but the good news is that so far the increase has been modest so that it doesn't look like right now we're going to lose near as many pigs to PED death loss this winter as we did a year ago.

Dr, Plain says producers have made money each month in 2014 and profits are expected to remain in that 40 to 50 dollar per head range through this winter, improve a bit during the summer and then decline but by December 2015 we still think hogs will be profitable.

He says 2012 and 2013 were very difficult for hog producers so this is a very welcome stretch of good returns.

Source: Farmscape