Red Oink Ahead for Pork Producers?

October 9, 2007 — 

Agriculture economists and marketing experts are speculating that swine producers may be headed back into the red through 2008 or longer depending on how they respond.

Chris Hurt, Purdue University Extension marketing specialist, along with Glenn Grimes and Ron Plain, ag economists from the University of Missouri, are predicting declining prices and rising costs in the face of a stable demand which all adds up to declining profits for pork producers. Fall slaughter numbers are projected to be 3% higher than 2006. Hurt estimates that 2008 production costs will be in the neighborhood of $51.50 cwt with hog prices near $48.50.

Grimes and Plain concur noting that October is likely to be the first month on record to slaughter more than 10 million hogs. They estimate the price for lean hogs to average in the upper $30s to low $40s cwt. Chicken production is also projected to reach record levels. The length of red ink is dependent on consumer demand and how quickly producers adjust their production according to the experts.

Source:
Pork Alert, October 9, 2007