Farmscape for January 12, 2018
An Agricultural Economist with the University of Missouri is confident that, despite the expectation of record hog numbers, North American pork producers will be even more profitable in 2018 than they were in 2017.
A Hog Market Outlook was provided yesterday as part of the 2018 Banff Pork Seminar.
Dr. Ron Plain, a Professor Emeritus with the University of Missouri, says although USDA is forecasting a 5.3 percent increase in U.S. pork production, another record, and pork production is expected to be higher in Canada, expanded U.S. slaughter capacity will be a factor.
Clip-Dr. Ron Plain-University of Missouri:
Hog prices aren't that fantastic but in the context of record pork production last year in 2017, expected again this year in 2018, we're in a situation where hog prices were slightly higher last year than they were in 2016.
The forecast is for higher prices again.
The good demand situation and, with relatively low cost feed, we're looking at a situation where producers are making money.
A typical producer may be an 11 to 12 dollar profit last year and potentially double that in 2018.
Hopefully both countries will be able to export more pork in 2018.
That will keep that growth in domestic supplies, it won't make it go away but will shrink it.
I'm hoping we can keep retail prices close to a year ago.
Packer margins are likely to tighten so, if all this can happen, we can actually see higher hog prices in 2018 than we had last year even though there's going to be quite a bit more pork.
Dr. Plain says we're hoping to see an increase in North American pork exports or we'll see domestic per capita consummation forced up.
He says consumers will gladly eat more pork but at a lower price, so if we can move more pork onto the international market we might be able to maintain those retail prices.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork