October 7, 2014
US hog raisers raking in high profits
American hog raisers haven't had it so good, as they enjoy profit margins that keep them laughing all the way to the bank.
With hog prices high and feed prices low, hog producers saw profits averaging around $80 per head during the third quarter, said Dr. Chris Hurt, a Purdue Ag economist. "With a sow able to produce about 25 pigs in a litter, do the math, those profits are going to be attractive to a lot of folks," he says.
The US pork industry is helped by a record harvest of corn, whose low price as well as of soy may attract newcomers including even grain producers to become pork producers, says Dr. Hurt.
He says, though, that newcomers won't have much impact on total production as "only about 30% of pork production is accounted for by smaller operations with 70% accounted for my larger operations."
He also sees pork profits average tapering off to about $30 per head next year. Pork consumers, therefore, can expect lower retail prices next spring, Dr. Hurt adds.