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Pork profitability still a question mark

Pork producers have been operating in the red since the fall of 2007. And Purdue University ageconomist Chris Hurt believes the financial stress may have some producers near a breaking point.

On April 24th, Hurt says, hog producers were losing about five dollars per head. Now that figure is about 25 dollars per head, with half of the increase due to lower hog pricesand the other half because of increased feed costs.

Iowa State University livestock economist Shane Ellis says hog prices should continue to improve over the next couple of months—but profitability is still up in the air.

“Will they see profitsthis year? There will be a couple of months in there where it will likely happen,” says Ellis. “I guess it really comes down to what happens with our corn prices. That’s still going to continue to be a major factor right now.”

Ellis says a sustainedrecovery in pork prices will depend on how quickly the U.S. economy recovers.

“That can only be good for our meat products,” he says. “That always ends up helping those sources of protein that tend to be a little bit more expensive—like beef and pork—ascompared to poultry, turkey and some of those other lower cost sources of protein.”

For his part, Hurt predicts hog prices could move to the low 50’s in June, and will average in the very low 50’s in the third quarter of the year.

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