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Turning the focus to risk management

A livestock economist is advising pork producers to improve their risk management sooner rather than later.

University of Missouri’s Scott Brown says there are a couple of things putting pressure on pork producers’ bottom line and one of those is input costs.  “One of the things in the short run we have to pay attention to is China,” he says.  “How much corn does the Chinese hog herd need?  How quickly are they rebuilding their herd and does African swine fever affect it?  Because I think it’s important to realize we could have higher feed costs and I think that’s demand-driven as much as anything at this point.”

He tells Brownfield at the same time, demand for US pork could be hitting a plateau.  “Oh, by the way, if the Chinese don’t need as much US pork that probably backs up meat supplies here in the US,” he says.  “I think there’s still a lot of risks out there.  I still wonder about the general economy drag.  I just don’t want folks to get caught not thinking about locking in both sides of the equation for a little while.”

Brown says producers need to know their cost of production and make adjustments when possible to maximize their return on investment.

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