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