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Economist: Hog picture brighter, recovery far off

Hog prices have rebounded in recent weeks, an unusual development for this time of year. 

University of Missouri ag economist Ron Plain says it’s an encouraging way to end the year.  But he says it will be several more months before the hog industry sees some profits and even longer before it fully recovers.

Plain says hog producers could see some profits by the middle of 2010.  “We haven’t had a profitable month anytime in 2009, but I think the odds are real good for a May-June-July-August next year to be profitable months.”

As to whether those four profitable months will continue through 2010, Plain says it largely depends on the economy and meat demand.  

Looking ahead, Plain says one of his concerns is how quickly producers will start to refill hog buildings once they start making money again.

“If we move quickly to refill them, then we could find ourselves in a situation sort of moving back and forth from a profitable to unprofitable industry and not accomplishing what we need to do,” he says, “which is make a lot of money and pay down this huge amount of debt that’s piled up in the last two years.”

Plain predicts it may be 2012 before producers see solid profits on hogs.  He says a lot depends on what happens with corn prices in 2010.

AUDIO:  Ron Plain

plain-ron-hogs 12-18-09

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