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

    Rice Market: Technical Indicators Remain in “Sell” Mode10-24

    Rice Crop: Harvest Nearly Complete, Ratoon Harvest to Start Soon10-24

    Rose on Cotton: Increased Export Competition with India10-24

    Grain TV: Unable to Sustain Yesterday’s Gains10-24

    DTN Livestock Close: Cattle Futures Move Lower10-24

    Doane Cotton Close: Strong Stock Market Keeps Prices Up10-24

    AFB Grain-Soybean Close: Markets Decline Across the Board10-24

    AFB Cotton Close: Higher in Middle of Day’s Range10-24

    AFB Rice Close: Nearby Contracts Slightly Higher10-24

    DTN Cotton Close: Jumps Ahead as Volume Improves10-24

    DTN Grain Close: Markets Pull Back, End Week Higher10-24

    Cleveland on Cotton: Market Keeps Spinning the Same Record10-24

    USDA: Peanut Price Highlights10-24

    Georgia Pecans: Very Light Deliveries, Season Still Running Late10-24

    Soybean Cyst Nematodes: Soil Sampling, Resistant Varieties Are the Best Defense – DTN10-24

    Farm Finances: Prepare Now for Rising Interest Rates – DTN10-24

    Mississippi Pumpkins: Heavy Rains Damaged Crop, Delayed Harvest10-24

    DTN Livestock Midday: Live Cattle Futures Turn Lower10-24

    Louisiana Soybeans: Headed for Another Record Year10-24

    DTN Grain Midday: Corn, Soybeans Move Lower10-24

    Dried Distillers Grains Eyed as Fish Food — DTN10-24

    DTN Cotton Open: Slightly Higher on Light Volume10-24

    DTN Livestock Open: Cash Cattle Values Surge10-24

    DTN Grain Open: Futures Extend Gains10-24

    Keith Good: EPA’s Water Rule Approved by Internal Review Board10-24

    Grain TV: Soybean Exports Double Expectations10-23

    Livestock: Country Of Origin Labeling Debate Marches On – DTN10-23

    Small Scale Organic Farming a Good Way to Branch into Ag – DTN10-23

    U.S. Grain Transportation: Higher Soybean Shipment Boosts Inspections10-23

    Advances in Farming Technology Continue to Aid Mother Nature — DTN10-23

    Ethanol Production Profits Hit the Wall — Why Did it Happen?10-23

    U.S. Energy: Crude Exports, Re-Exports Continue to Rise10-23

    Gasoline Prices: Show 9-Cent Decrease10-23

    Propane Stocks: Increase by 0.2M Barrels10-23

    Diesel Prices: Average Drops 4 Cents10-23

    Alabama: Recent Weather Radar Oddity Was Mayfly Swarm10-22

    Soybean Harvest: Prioritize Shatter-Prone Fields – DTN10-22

    Ethanol: Court Tosses E15 Labeling Lawsuit – DTN10-22

    Georgia: 2 Counties Declared Natural Disaster Areas10-22

    Arkansas: 2 Counties Designated Natural Disaster Areas10-22

    AgFax Grain Review: More Lawsuits Against Syngenta; Harvest Well Behind Pace10-22

    2 Families, 2 Approaches to Building Ranch Tourism — DTN10-22

    Don’t Just Piggy-Back on Others’ Prices in Ag Commodity Markets10-22

    National Cotton Council Commends Timely APH Announcement10-22

    Wheat Growers to Seek Inclusion in APH Yield Exclusion for 2015 – DTN10-21

    Farm Shop Dream Requires Thoughtful Planning – DTN10-21

    USDA: Weekly National Peanut Prices10-21

    USDA to Implement APH Yield Exclusion for 2015 Spring Crops10-21

    Arkansas: USA Rice Outlook Conference Set Dec. 7-9 in Little Rock10-21

    AgFax Cotton Review: Lower Acres May Close Mill; Australia Acres Up10-21

    DTN Fertilizer Trends: High Costs May Alter Growers’ Tactics for 201510-21

    Herbicide Resistant Weed Summit’s Slides, Webcast Available Online10-20

    Rice and Sugar: Thailand’s Quest for World Domination10-20

    AgFax Peanut Review: NM Down 6M Pounds as State Celebrates 100 Year Crop10-20

    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