Pork Producers Could See Modest Profits In 2016

Apr 01, 2016

Smaller hog breeding herds and lower production costs could lead to modest profits for pork producers in 2016, Purdue University agricultural economist Chris Hurt says.

In his analysis of the U.S. Department of Agriculture's March Hogs and Pigs report, Hurt forecasts a slight slowdown in pork production after two years of expansion.

"For right now, the industry seems to have supply in alignment with pork demand such that prices cover the full cost of production," he said.

According to the USDA report, pork producers intend to reduce the number of sows farrowed by 1 percent this spring and 3 percent this summer.

"If they follow through on these intentions, then pork supplies will be smaller than previously anticipated next fall and winter," Hurt said. "Smaller anticipated supplies will likely boost price prospects."

Hurt projects live hog prices to range from $49 to $54 per hundredweight for all of 2016, about $1 higher than last year.

"Hog prices stand ready to make their normal seasonal rally into early summer," he said. "Current prices in the higher $40s are expected to move to the higher $50s or low $60s by June and July. Strong prices are expected until September when the normal seasonal pattern begins a sharp decline."

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Pork Producers Could See Modest Profits In 2016

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