Despite economic turmoil, moderately high feed costs and weak domestic demand, U.S. hog prices may record gains in 2009, thanks to strong export demand and less pork production, says Ron Plain, University of Missouri agricultural economist.

That does not mean, however, that raising hogs will be profitable next year, he explained in a keynote speech at Kansas State University’s annual Swine Day in Manhattan on Nov. 20.

“It’s hard to be optimistic about domestic demand with the economy the way it’s going right now,” says Plain.

The economist forecasts Iowa-southern Minnesota negotiated price per carcass, hundredweight, in 2009 to average $67 to $72.

The 2009 average price prediction compares to the projected 2008 average price range of $63-64/carcass cwt., and the actual average price in 2007 of $61.91, he says.

Plain’s forecast, by quarter, calls for a price range of $58 to $63 in the first quarter; $70 to $75 in the second quarter; $73 to $78 in the third quarter and $66 to $71 in the fourth quarter.

Live hog prices in the Iowa-southern Minnesota market are projected to average $51 to $55/cwt. for 2009, slightly above the projected price of $48-49 in 2008 and the actual average price of $47.05 in 2007.

According to Plain, production of all four meats typically consumed in the United States – pork, beef, chicken and turkey – is expected to decline next year. If that happens, it would be the first time since 1973 that production in all four categories was less than the previous year.

Overall, hog slaughter is pegged at 113.670 million head in 2009, down 2.7% from 116.830 million head projected in 2008, but up from 109.172 million head in 2007.

Plain says the economy is expected to keep U.S. pork demand weak, but U.S. pork exports and fewer farrowings expected next year offer bright spots in the industry.

“Export demand is what’s driving hog prices; 2007 was the 16th-consecutive record year for U.S. pork exports, and 2008 will mark the 17th year,” he notes.

January-September U.S. pork exports were valued at $3.114 billion or $36.11/hog slaughtered, according to U.S. Department of Agriculture data.

The other bright spot in the hog market is continuing improvements in efficiency.

“The number of litters/sow/year has been increasing since 1930 and carcass weights also have been increasing,” Plain says. “The average slaughter weight has been going up one pound per year for the last 50 years.”

Since 1930, the United States has reduced sow inventory by 42% but increased annual pork production by 21%.

That trend is expected to continue with further improvements in swine genetics.