It's hard to find too many winners in the current and projected economic slump, but hog producers are likely to benefit from lower input costs, higher hog prices and increased pork demand in 2009, according to Purdue University agricultural economist Chris Hurt.

In a recent report, Hurt projected a 2 percent to 3 percent reduction in pork supplies in 2009, as producers cut back in both the United States and Canada.

He also predicted the tight economy will continue to shift consumer spending to pork from beef, noting that in 2008 pork prices averaged 2.92 per pound compared to beef at an average price of $4.31 per pound.

As for input costs, Hurt forecast corn will average about $3.40 per bushel in 2009, compared to $4.60 per bushel in 2008. He pegged soybean meal at about $250 per ton next year, down from about $330 per ton this year.

"When you add these things together, we actually think the cost of production will drop from about $53 per hundredweight in 2008 to around $47 per hundredweight next year," Hurt predicted. "When you combine the lower cost of production with the smaller hog supply, pork producers should see some profitability by late winter-February and March."

Hurt expects hog producer price revenues in the low $50 range next year, up from an average price of $48 per hundredweight this year.

Noting the uncertainties always implicit in production agriculture, Hurt said hog producers should consider using the futures markets to buy corn and sell lean hog futures now to lock in profitability.

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