Expensive corn could result in smaller pigs
The effect of the ethanol on corn prices could mean a
significant profit downturn in pork over the next few years, according to Steve
Myer, founder and president of Paragon Industries at the 29th Pennsylvania Pork
"This situation with ethanol is one that's going to be quite important and
more or less permanent," he said.
Higher oil prices and the increased
movement towards ethanol has sent corn prices in the US above $3 per bushel and
many experts, including Myer, think prices could reach $4 or even $5 per
Effect on the pig industry
So what does all of this
mean for the pig industry? Myer said the higher corn prices will lead to lower
average carcass weights on the market and lower selling prices because producers
won't be able to feed hogs as much as they used to.
"We're going to
see weights two to three pounds below average," pretty regularly he
Don't count on DDGS
Myer said don't count on Dry
Distillers Grains Solubles (DDGS), which come from the production of ethanol, to
be the solution in the face of high corn prices.
He said there are
many challenges with DDGS including the work it takes to make the feed usable
and its consistency. He also said prices of DDGS will only rise with corn
prices. "I think we're always going to be in the backseat when it comes to
DDGS," he said.
Focus on export
With many obstacles in the
way of pricing pis for profit, Myer said there is still a light at the end of
the tunnel. That light is export markets.
Lou Moore, agriculture
economist at Penn State, said over 90% of the pig market is outside of the US
Myer said producers should pay close attention to the corn and soybean markets
this spring as well as the lean pig markets to possibly lock in good prices for
â€¢ Pennsylvania State University
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