Cheaper Corn, High Priced Beef Are Both Good News For Pork Producers

Cheaper Corn, High Priced Beef Are Both Good News For Pork Producers

To listen to Ken’s Money Matters report on 2014′s outlook on swine producer profitability, click here.

Hog farmers are making money now, and are projected to do so into 2014, according to President of Paragon Economics in Adel, Dr. Steve Meyer.

“They made some money this summer,” says Meyer, “and it looks like they are going to make some money through the fall right now.”

He explains the drop in corn prices has made a huge difference in input costs and should allow profitability for the year ahead.

Meyer’s model projects hog farmers will make $25 per head in 2014, Meyer says “that means the good producers will make $35 or more.”

Meyer also believes high prices for beef will be good for pork.

“Record beef prices over the next year or two will allow the pork industry to capture some market share,” he says. “It may also change some buying habits as consumers will look at a T bone chop at $3.99 per pound and a T bone steak at $7.99 and say ‘Maybe I’ll try that!’”

The ethanol era changed the structure of the industry, according to Meyer, particularly in that much higher meat prices are needed to make a profit because costs of production are sharply higher.