COLUMBUS, Ohio Pork
market prices are approaching
$5O per 100 pounds, and for the
first time in three years, produc
ers are making decent profits,
said Brian Roe, Ohio State Uni
versity Extension livestock eco
nomics specialist.
November 1997 was the last
time price levels were this high,
and current profit levels are the
best since the summer of 1997,
Roe said.
“March was one of only about
six months since the summer of
1997 where producers made
more than just a few cents of
profit per 100 pounds of pork,”
he said.
Pork prices this March aver
aged $43 to $44 per hundred
pounds (cwt.), and prices in
early April were in the middle to
upper s4os. Prices are projected
to peak at about $5O per cwt.
from June through August and
then return to the $4O- to $45-
per-cwt. range this fall and
winter, Roe said.
With production costs near
$35 per cwt., most producers
earned about $9 above
breakeven in March, compared
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Pork Producers Partying Like It’s 1997
to losses of $4 per cwt. in 1999
and $7 in 1998.
Hog prices had been in the
mid $3O to low $4O range from
November 1977 to September
1998, and that’s when the bad
times began, Roe said.
Prices dipped below $3O per
cwt. in September 1998, and
producers began experiencing
major losses. That month, the
average producer lost $25 for
each hog sold. The bottom fell
out in December 1998 when
prices dropped to about $lO per
cwt., and producers lost nearly
$6O per pig.
Overexpansion encouraged
by strong profits in 1996 and
1997 and fears of future envi
ronmental restrictions com
bined with processing shortages
and a natural dip in the price
cycle to cause the dramatic
plunge in prices, Roe said.
The first few months of 1999
were better, with prices back in
the mid $3O-per-cwt. range by
May. But the U.S. Department
of Agriculture’s Hogs and Pigs
Report released in June showed
the poor market had not caused
production to drop as much as
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expected, and prices again
dropped below $3O per cwt.
“The last two years have been
really tough for pork produc
ers,” Roe said. “Once inflation
is taken out, hog prices in 1998
were 30 percent lower than they
were during the Depression.”
The recent improvement pri
marily has occurred because the
U.S. hog breeding herd has fi
nally shrunk enough in response
to the poor prices, lowering pork
supplies, Roe said. Prior to the
big collapse in September 1998,
there were 6.9 million breeding
hogs in the United States. Since
then, the breeding herd has de
clined 10 percent, to 6.2 million
hogs.
“The eastern Corn Belt has
contributed a lot to the reduc
tion in breeding hog numbers,”
he said. “There are 20 percent
fewer breeding hogs in the east
ern Corn Belt now than there
were in 1998.”
Ohio’s breeding herd is esti
mated to be 18 percent lower
than a year ago. Only Indiana
with a 17 percent decline and
Wisconsin with a 24 percent de
cline experienced similar drops,
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Roe said.
The number of hogs being
taken to market also has shrunk,
although not as much as the
breeding herd.
“During the same time period
(September 1998 to March 2000)
the number of animals taken to
market went from 56 million to
52 million, only about a 7 per
cent drop,” he said. “Market
hog numbers didn’t decline as
much as breeding hog numbers
because the larger, more effi
cient operations that produce
more pigs per sow have re
mained, while many of the
smaller, less efficient operations
have dropped out.”
Operations with more than
5,000 breeding hogs produce
8.96 pigs per sow, while opera
tions with less than 100 sows
produce only 7.73 pigs per sow
a 14 percent difference.
Other factors contributing to
the turnaround in pork prices
are that processing shortages are
no longer an issue and demand
for pork and meat in general
has increased because of a
strong economy, changes in di
etary habits and better quality
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In response to the stronger
prices, producers are starting to
stabilize the decline of the breed
ing herd.
“Already in January and Feb
ruary of this year the number of
sows taken to market is down
compared to last year,” Roe
said. “But the market doesn’t
seem to be concerned about it
yet, because it hasn’t made a dif
ference on the futures market.”
More pork and other livestock
economic information for Ohio
and the United States is avail
able on Roe’s Ohio State Univer
sity website (http://www
agecon.ag.ohio-state.edu/
Faculty/broe).
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