That is the thought of many producers as they reflect on 2009 – a year likely to be remembered as one of the worst years, financially, for the swine industry. Often, while talking with pork producers and trying to make some sense of it all, inevitably one of us would declare, “I have never seen this before,”
In late April, the swine industry was being associated with a human influenza pandemic, which devastated hog prices at a time when we normally would see prices improve. In August, cash hog prices slipped to the lowest level seen since 1945. Then, in December, we saw cash prices and pork cutout values at the high for the year. It was a year to expect the unexpected. It also brought the swine industry to a point where it has lost money for over two years straight – a situation that cannot continue for much longer. We are at a point where the economics must improve in 2010 for many pork producers to remain in business a year from now.
Corn quality issues? I have been hearing numerous reports throughout the United States that producers are dealing with moldy and poor quality corn. Compounding the problem, if you are feeding corn distillers grains, the mold content may be even higher, which may cause more problems in swine diets. Pork producers are very creative. They will find a way to work through these feed quality issues, but it will come at a cost.
Two things to watch in 2010 – will slaughter weights hold steady to a year ago and will sow performance be affected by moldy corn? The only positive thing that could result from these issues is there could be less pork on the market.
Better days ahead? I certainly hope so. The biggest question I keep asking myself is whether we can average close to $75/cwt., carcass, just to make a little money? We have never been at that level. Where does supply and demand need to be in order to get to those levels? At current feed costs, breakeven costs for most producers are close to $68/cwt., carcass, so we need to average $70-75/cwt.
Hog price and pork demand projections look much better. Pork producers certainly need and deserve better days ahead. Let’s hope that 2010 will be a much better year than 2009.
Mark Greenwood
Swine Industry Consultant
Contact Greenwood at mgreenw@agstar.com