Analysts expect losses for hog producers
Following a USDA report showing an increase in hog
numbers on US farms, experts are predicting further losses for farmers.
"We're looking at big-time red ink," said John Lawrence, Iowa State
University Extension economist. "There will be some producers who will opt out
of hog production," particularly those farmers who are diversified in crops and
who can sell their corn and soybeans at today's high prices.
The reports stated that the number of hogs on US farms is currently 65.9
million, which represents a 7% increase from this period a year ago.
the US hog-producing state of Iowa, 18.7 million hogs were reported at the
beginning of March this year -up % from 2007.
No other major hog- producing state came close to matching Iowa's increase in
hog numbers. In North Carolina, a 6% increase was reported in its total
inventory to 10 million hogs.
Hogs used for breeding purposes totalled
6.14 million on March 1, the USDA said, an increase of less than 1% from a year
Reduction in hog herd
Lawrence believes that
Iowa hog producers have lost money on each hog sold for five months in
It will be the end of 2008 or into early 2009 before there
is a reduction in the number of hogs sent to slaughter and hog prices improve,
Professor and Extension leader at Kansas State
University, James Mintert, said that the report showed that breeding herd
numbers indicate "a little bit of interest in reducing the herd, but it's pretty
low and pretty small."
Hog prices will continue to be affected by large supplies of beef and
poultry. In addition, larger exports of corn and soybeans are expected because
of the relatively cheap US dollar, Mintert said, and that will make feed costs
"If we see some adverse weather conditions this summer, we
could be setting ourselves up for a train wreck," Mintert said. "If we have any
kind of crop production trouble this summer and a significant yield downturn,
then you create an explosive situation for grain prices this summer."
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