August 3, 2023
Mike Pearson takes a look at the hog market and what producers are facing in the marketplace.
In late spring 2023, CEO for Smithfield Farms said hog producers were losing 80 per head.
This was due to slowdown in foreign purchasing and oversupply of market ready hogs.
The markets clawed their way back and now producers are at only about 40 per head.
Some of the issues were tied to higher operating costs feed costs-- up 19 percent but hog prices only went up 14 in recent years.
Since 2016-2020, feed costs are up 78 percent-- hog prices have only went up 45 percent.
Borrowing costs are also hurting hog producers who want to expand or build new barns. The average loan price for a hog barn was $26 and now it's $41due to higher interest rates and construction costs.
On the demand side, two-thirds of the domestic pork ends up as bacon and sausage or ham. However, pork cuts such as loins are not selling.
Another factor, hog producers are watching is the African Swine Fever outbreak in China-- the herd is rebuilding but is not expected to be in full production in 2023.
Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, a farm broadcaster and host of This Week in Agribusiness.
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