“The National Pork Producers Council (NPPC) is very concerned with the effect on America’s pork producers of raising to 15% the amount of corn ethanol that can be blended into gasoline, a decision the Environmental Protection Agency announced Wednesday,” says Randy Spronk, NPPC Ethanol Task Force Chairman.
“NPPC is withholding comment on raising the blend rate to E15 from its current E10 until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers,” adds the Edgerton, MN, pork producer.
“Given that the U.S. Department of Agriculture’s Oct. 8 corn crop revised down the expected yield and ending stocks of corn, we’re already seeing corn prices and the cost of raising a hog head up,” Spronk continues.
Corn prices Wednesday reached a high of $5.88 a bushel, compared to under $4 a bushel in August. Corn for December delivery Wednesday was up 4.2% from the day before and has risen 17% in the past three days, ending at $5.79 a bushel.
These higher corn prices have dropped pork profit prospects for 2011 to an average of just $1.19 per head, down more than $5 per head from a week ago, according to agricultural economist Steve Meyer, president of Paragon Economics, Adel, IA.
“We don’t want a repeat of a couple of years ago when, due mostly to high feedgrain prices, pork producers lost an average of almost $24 a hog from October 2007 through March 2010, and the industry lost nearly $6 billion. Family hog farms went out of business during that time, and many producers reduced the size of their herds.”