Lower production costs and increasing market prices on the horizon are nudging the expansion of the U.S. pork industry.
Chris Hurt, an agricultural economist with Purdue University, noted that going back to 2012, which was when much of the crop was affected by the drought, the cost of pig production per 100-pound live weight was $69.
Currently the cost of production for pigs per 100-pound live weight is $57.
"A huge drop in cost of production, and high hog prices set up high returns," Hurt said.
The agricultural economist mentioned that in 2013 the 100-pound live weight quarterly average was $64, and the estimated quarterly average for 2014 per 100-pound live weight is $69.
The 2014 quarterly breakdown is as follows:
- The first quarter will be $65 per 100-pound live weight
- The second quarter will be $76 per 100-pound live weight
- The third quarter will be $72 per 100-pound live weight
- The fourth quarter will be $62 per 100-pound live weight
During the first quarter of 2015 the market prices for hogs per 100-pound live weight is expected to be at $60, which Hurt noted is anticipation of the pork industry going into expansion mode.
The low cost of production and the rise in hog prices will lead to high returns in 2014, with an estimated $34 per headin profitability.
"The returns will be near the best in recent years," Hurt said.
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