U.S. pork producers are benefiting from the lowest breakeven hog prices in 13 years.
John Lawrence, Iowa State University (ISU) agricultural economist, estimates the average breakeven price of an Iowa market hog during the first 8 months of 2000 at $39.34/cwt.
And, there is no end in sight to low feed costs. USDA forecasts the current corn crop at 10.362 billion bu., 311 million bu. above the record corn crop of 1994. USDA predicts this year's soybean crop at 2.9 billion bu., 159 million bu. above the record 1998 crop. This will keep breakeven hog prices under $40/cwt. well into 2001, according to Ron Plain, University of Missouri agricultural economist.
All in all, the combination of low feed prices and high hog prices has 2000 shaping up to be a more profitable year than expected. ISU calculates the average market hog sold in the first eight months of 2000 yielded a profit of $13.48/head.
There was a lot to be positive about in the pork industry the last week of October. I realize it is difficult to be optimistic when you are still losing $25 to $30/head. I also realize that positive news at this point could be as dangerous as it is welcome. But facts are facts, and we must recognize them.
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As I begin this week's column, I"m reminded of two different "flip side" statements that may help characterize the topic at hand. The first is the old Archie Campbell schtick - "That's good - no that’s bad," which I have used before. The second reflects President Truman's frustration with economists' incessant use of the qualifier - "on the other hand" - to introduce the contrary opinion on a given topic. President Truman once demanded in his usual colorful language: "Will someone please find me a *!&%$*?>
