Source:  Chris Scott, MEATINGPLACE.COM, 5/9/11

Higher expenses for pork producers are unlikely to lead to herd-thinning in 2011, according to one industry analyst, while another observer is predicting pain for consumers at the grocery check-out for the bulk of the year.

Steve Meyer, president of Paragon Economics and co-author of the CME group’s Daily Livestock Report, tells Meatingplace that he doesn’t believe that hog producers will begin selling off their herds because of record-high corn prices so far this year. “Corn prices are actually coming down slightly and looking at the places where hogs and corn are selling, there’s no reason to believe there will be any liquidations by hog producers,” he says. Meyer warns that the situation remains volatile, especially if corn production dips this summer.

Meyer’s outlook echoes testimony this week by Seaboard Foods President and CEO Rod Brenneman, who told the U.S. House Committee on Agriculture that feed costs in 2011 will be $85 million higher than in 2010. But more opportunities for exports are expected to help pork producers and processors like Seaboard address the impact despite the challenges, he added.

Meanwhile, consumers can expect a long, expensive summer if they plan to buy protein, especially pork and red meat. Ron Plain, professor of agriculture economics at the University of Missouri notes that retail pork prices in March were the second-highest ever and April numbers may hit a new record when those figures become available. “Meat is going to be expensive this summer and pork producers will have to deal with higher costs for some time,” he told Meatingplace. Plain adds that corn plantings are at 13 percent so far this year, significantly lower than the 66-percent level at the same time last year. “This is weather-dependent, so we’ll have to see if there’s an additional effect on the market for the rest of the year,” he says.
 

For more stories, go to www.meatingplace.com.