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Pork price expectations low for 2018 and 2019

Pork Prices, Pork Exports, Pork Price received

Pork Marketing’s and prices

Hog marketing’s have increased dramatically in the last 5 years by more than 10 percent or 16.5 million head.

The rise in marketing’s corresponds to the prices for pork which have decreased significantly in the corresponding years, and continue to fall in the months thus far in 2018. In a recent report from the University of Illinois: Department of Agricultural and Consumer Economics there has been an increase in demand for pork as represented on the consumer side price for pork going from $3.69 per pound in 2017 to $3.75 in 2018. (Hurt, C. 2018)

Pork Exports

The USDA reports that expectations for pork exports are promising, with increases of 5 percent in 2018. Since 2013 exports of pork and pork products were reported to have risen 14 percent or 307,000 metric tons.

U.S. Inventories

Within the United States it is commonly know that the Midwest produces a vast majority of the hogs within the United States, of course there are also many hogs within the Carolinas as well. March 2018 inventories showed Iowa having 31 percent of the hog inventories, this is only 1 percent lower than the remaining 45 states combined (outside of the top 5), and 19 percent higher than the next highest state, North Carolina.

Summary

Expectation for losses in the hog industry were estimated to be more than $25 per head by the last quarter of 2018 and the first quarter of 2019, in the report from the University of Illinois. Additionally, profit per head in 2017 was, on average, $4 per head, the expectation for 2018 is that number falling to losses of $11 per head, and then further to $14 per head in 2019. With trade deals in flux, and with the export market representing more than 20 percent of US pork production any major changes to that number could influence prices and profits.

 

Resources:

Hurt, C. "Pork Industry May Face Large Losses." farmdoc daily (8):101, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 4 2018.

About Author: Preston Lyman is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.


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