Hog farmers can thank increased international demand for U.S. pork for the profit-making market prices in the months ahead, says Purdue economist Chris Hurt. Writing at farmdoc Daily, Hurt forecasts an average market price of 50 cents a pound for hogs, nearly 4 cents higher than the average price in 2016.
At that level, producers would make a profit of $3 for each hog they send to market this year. Hog prices tend to be highest in the middle of each year, so Hurt estimates a profit of $9 per hog in the current quarter and $15 a head in the summer quarter. In the final three months of the year, Hurt says production costs will exceed market prices, so farmers will lose money on hogs during that period. Corn, a key ingredient in hog rations, will go up in price this fall while hog prices traditionally decline.
So far this year, pork exports are up 17 percent and imports are down 10 percent, compared to 2016. Some 22 percent of U.S. pork is being exported, the largest export share since 2012, when exports were record large. “Who do we have to thank for these near record exports?” said Hurt. “Shipments to Japan, our largest customer, have been up eight percent; Mexico, our second largest customer, has purchased 33 percent more than last year; and South Korea, our fourth biggest customer, has purchased 32 percent more.”