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AGRIBUSINESS:Pork Profits on the Horizon?

Posted on: 8:39 am, January 8, 2013, by , updated on: 08:40am, January 8, 2013

Purdue University Extension Economist Chris Hurt says pork profits are out there. With the peak of the drought – Hurt says feed prices reached a summit in the third quarter of 2012. He says estimated total hog production costs shot up 10-dollars per live hundredweight – reaching an estimated 72-dollars. Last fall and this winter – Hurt says costs dropped about four-dollars per hundredweight and are expected to moderate an additional eight-dollars with normal 2013 crop production. According to Hurt – that could put estimated costs of production around 60-dollars per hundredweight by fall.

Due to small beef supplies, continued strong pork exports and modestly improving consumer incomes – Hurt says hog prices are expected to be somewhat stronger in 2013. Live prices averaged about 62-dollars in 2012. They are expected to rise to near 66-dollars for 2013. By quarter – prices are expected to average around 63-dollars in the first quarter, 71-dollars in the second quarter and 69-dollars in the third quarter. Hurt says fall 2013 and winter 2014 prices are expected to reflect higher pork production with prices averaging around 61-dollars.

Hurt says losses will continue in the first quarter of 2013 and are expected to average about 15-dollars a head. But in late April or early May – when the spring hog price rally is underway and meal prices edge lower with the South American soybean harvest – Hurt says a return to profitability is expected. According to Hurt – profits are projected at about 10-dollars per head for the second and third quarters before returning to breakeven in the fall of 2013 and winter of 2014