Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 6/30/10

Hog prices and profitability will remain strong into 2011, according to Purdue University Extension Economist Chris Hurt, but the average live hog price in May of $63 per hundredweight was a "a short-term aberration."

With pork supplies remaining tight, retail pork prices will continue to rise this summer, slowing pork consumption, Hurt predicted in a report. He said the slow economic recovery and continuing high unemployment will also contribute to weak retail demand and more moderate live hog prices.

Still, Hurt expects live hog prices to be in the higher $50s for the rest of the summer and then begin a seasonal decline in September. He put third quarter prices in range of $56 to $59 per hundredweight and fourth quarter prices between $50 and $53.

For 2011, Hurt predicted prices may average around $55 per hundredweight in the spring quarter and around $53 in the summer. Further build- up of pork production by the fall of 2011 might pressure prices back into a range from $45 to $50 for the final quarter of 2011.

At the same time, with feed costs in the coming 12 months expected to be the lowest since 2007, Hurt said total costs per live hundredweight will drop to a range of $46 to $48 from $50 in 2009. That would put profit per head near $21, compared to a per head loss of $24 in 2009.

He called the profit outlook for 2011 "positive," especially through the summer.

In terms of hog production expansion, Hurt speculated those who believe corn will be under $3.50 per bushel might elect to expand in the range of 3 percent to 5 percent while those who believe corn prices will move back to $4.00 will probably not expand.

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