Friday, June 14, 2013
hog_farm

Indiana: Hold Off on Expanding Hog Operations, Economist Says

AgFax.Com - Your Online Ag News Source


Although hog production has returned to break-even levels, Purdue Extension agricultural economist Chris Hurt advises producers to forego expansion for now because of delayed planting and uncertainty about this fall’s corn harvest.

Pork producers were among some of the hardest hit financially when the drought of 2012 decimated grain supplies and sent feed prices skyrocketing. But hog prices have rallied this spring, from the mid-$50s per hundredweight in March to the low-$70s, and feed prices have fallen somewhat on the heels of the U.S. Department of Agriculture’s March Grain Stocks report that showed more grain than expected.




Even so, late spring planting has brought on some worries about hog production costs, Hurt said.

“Delayed planting has most recently sent corn and meal prices trending upward, raising concerns that hog production costs will not drop as much as some had anticipated,” he said.

Current production costs are about $67 per live hundredweight. Hog prices for the third quarter are expected to remain about the same, leaving producers at break-even levels for the foreseeable future, Hurt said.

Break-even means that all of a producer’s costs are covered, including depreciation and family labor. According to Hurt, most producers could continue their operations under break-even conditions, but they aren’t likely to expand.

While corn and soybean meal prices are expected to decrease in late summer and into fall as the new crop supplies become available, Hurt said hog prices also would fall, continuing the break-even trend.

“Current forecasts are that fourth-quarter corn prices will be $1.25 lower per bushel than third-quarter prices and soybean meal prices will be $40 lower per ton,” he said. “That means costs will drop from about $67 per live hundredweight this summer closer to $60 for the final quarter of the year.

“Hog prices are expected to be near the $60 level for the final quarter of 2013 and 2014, thus continuing break-even conditions.”

Hurt advised producers to keep expansion plans on hold until they see how this year’s crop sizes and prices pan out and how they will affect hog production costs. More information about the crop will become available over the next 60 days, as the growing season progresses.

“In general, if corn prices stay below $6 per bushel, the pork industry will be able to survive another year of low crop production,” he said. “Corn prices above $6 would push the outlook back to losses.

“The opposite would be true of $5 or lower corn prices. Some expansion could be expected with low $5 corn prices, and a more aggressive expansion would be expected with corn prices dropping below $5.”

With that in mind, Hurt said expansion of the U.S. pork herd isn’t likely until at least the fall. Any expansion at that time would begin with gilt retention and wouldn’t increase pork supplies until late summer and fall of 2014.


Tags: , , , , , ,


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    DTN Livestock Open: Feeder Contracts to Surge Further10-2

    DTN Grain Open: Wheat Futures Begin Higher10-2

    Keith Good: Fight Against PED Virus Accelerates as Pork Prices Climb10-2

    Grain TV: Positive Day but No Major Gains10-1

    DTN Livestock Close: Cattle Futures See Bullish Explosion10-1

    U.S. Dollar Strength Weighing Down Commodity Markets – DTN10-1

    DTN Cotton Close: Settles to Marginal Losses10-1

    DTN Grain Close: Slight Price Rebound10-1

    DTN Livestock Midday: Strong Gains Develop Across Complex10-1

    U.S. Ag Shortliners Take Their Technology to World — DTN10-1

    DTN Grain Midday: Futures Lower in Quiet Trade10-1

    DTN Fertilizer Trends: State Averages for Anhydrous Vary Widely10-1

    Good on Grain: Stocks Estimates Provide No Support for Prices10-1

    Arkansas: Winter Wheat Growers Set Another Yield Record10-1

    Georgia Peanut Commission Launches Peanut Allergy Website10-1

    DTN Cotton Open: Edges Higher within Tight Ranges10-1

    Shifts in Corn Consumption Revealed in USDA Report — DTN10-1

    USDA Grain Stocks Report Bearish for Corn, Wheat — DTN10-1

    Farm Bill Decision Deadlines and the Farm Bill Toolbox9-30

    Doane Cotton Close: Analyst Predicts 40 Cent Futures9-30

    AFB Grain-Soybean Close: Prices Lower Despite Bullish Soy Stocks9-30

    AFB Cotton Close: Futures in the Red9-30

    AFB Rice Close: Futures Fractionally Mixed9-30

    AgFax Cotton Review: Global Supply Hurts Prices; Cotton Transition Assistance Program Deadline Looms9-30

    USDA: Weekly National Peanut Prices9-30

    USDA Grain Stocks: Corn Up 50%, Wheat 2; Soybeans Drop 359-30

    USDA Wheat: Production Drops 5 Percent from 20139-30

    Grain Storage, Transportation Worries Mount — DTN9-29

    Soybeans: Protein, Oil Values Rate More Market Attention — DTN9-29

    Soybean Harvest Rises by 7 Points, Corn 5 — DTN9-29

    Growing Demand for Pork Likely to be Met — and Quickly9-29

    Peanut Stocks and Processing: Utilization Up 4%, Stocks at 1.4B Pounds9-29

    Peanuts: New Revenue Policy Implemented by USDA9-29

    Flint on Crops: What is a Good Variety Worth?9-29

    Southern Grain Crops In 2014 – Top 10 Trends, Issues, Setbacks – AgFax9-28

    Farm to Table: Something Old is New Again. – AgFax9-26

    Rice: Mexico To Restore Import Tariffs on Asian Rice9-26

    Rice Crop: Delta Area Harvests Picking Up Steam9-26

    Rice Market: Strong Friday Push Makes for a Positive Week9-26

    Rose on Cotton: Bearish News – We got plenty.9-26

    Cleveland on Cotton: Chinese Moves Send Market into Free Fall9-26

    Sizing Up Sudden Death Syndrome: Management Decisions to Fight Back – DTN9-26

    Nebraska: New Study Addresses Climate Change Challenges – DTN9-26

    GMO Wheat Appears in Montana as USDA Wraps Up Oregon Investigation – DTN9-26

    Welch on Wheat: Harvest Behind Normal, Conditions Decline9-26

    Louisiana: Ag Officials Ask for New Rules for Drones9-26

    Welch on Grain: Corn Condition Improves Slightly9-26

    USDA: Peanut Price Highlights9-26

    Shurley on Cotton: Carefully Consider Selling Options9-26

    AgFax Wildlife Review: S.C. National Park Confronts Wild Hog Problem9-26

    Crop Insurance Details Clearing Up — DTN9-26

    Sunbelt Ag Events

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney