Profitability continues to evade hog producers.
According to data from Iowa State University, farrow-to-finish operations lost $5.87 per head in January, but this was a drastic improvement from losses of $28.48 per head in December.
“The current string of six consecutive months of negative returns is the longest since 2013,” the Livestock Marketing Information Center writes in its analysis. “The sum of monthly returns for 2018 was negative, (which is) also the first time this has happened since 2013.
“This raises the issue of if, or when, the hog industry will suspend the expansion in hog production that has been in place since 2013.”
Over the past year, hog producers showed profitability in just three months. That figure was seven months the year before, according to the LMIC.
More should be known when the USDA’s Hogs and Pigs report is released March 26.
“The impact of six months of unfavorable profitability would normally be expected to temper the enthusiasm to produce more hogs, but the structure of hog futures market prices could be an offset,” the center says. “During February, the June hog futures contract averaged a premium of $17.71 per hundredweight to the April contract price. Normally, this premium has averaged in the $8-$10 range, with the prior high being $13.61 in February 2015.”
A revision to January 2018’s beef cow numbers greatly impacts USDA’s recent cattle inventory report. The figure was raised almost 250,000 head, resulting in Jan. 1, 2019, beef cow numbers that were up just under 1 percent.
“The largest change was made to the calf crop in 2017, which last year was reported to be just over 35 million head,” the center says. “The 2019 estimate for 2017 was revised upwards by 1.9 percent to 35.8 million head.”
December trade numbers released on March 7 indicated 2018 was a good year for meat and poultry exports. Beef exports were up 10.3 percent in 2018, including six months with double-digit export gains, according to the LMIC.
Pork exports were up 4 percent from the previous year.