Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 3/3/10

Live hog prices are expected to average about $51 per live hundredweight for 2010 with costs around $47, according to Purdue University Extension Economist Chris Hurt.

In a report, Hurt said this would translate into a profitable year of about $10 per head, with the best of those profits coming this spring and summer, compared to losses in 2008 and 2009.

"However, $40 of losses ($17 and $23 per head in 2008 and 2009, respectively) over the past two years will not be recovered with $10 per head of profits in 2010," warned Hurt. "The industry should not interpret the outlook for a little black ink in 2010 to be a signal to race back toward expansion. As an example, a U.S. drought in 2010 would quickly send feed costs back above breakeven levels."

Hurt pegged the profitability on reduced supplies, improved demand and lower feed costs. He also noted slimmer retail pork margins, which dropped to about $1.60 per pound this winter from about $1.85 last summer, increasing producers' share to 30 percent from 23 percent of retail pork sales.

Stronger demand is expected to come from higher exports, a recovering U.S. economy and the passing of H1N1 from front-page news. Domestic per capita pork supplies are expected to be down 4 percent to 5 percent this year.

Live hog prices are expected to move into the higher $50s in the late spring and early summer. Second-quarter prices are expected to average in the mid-$50, and third-quarter prices about $1 lower. The last quarter of 2010 and winter of 2011 may see prices drop back seasonally to the $47 to $49 range, Hurt predicted.

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