High Production; Low Profits in the Hog Industry

Pig production is increasing faster than expected taking prices down.

Pork producers are going to find 2008 a tough year on profits. Two factors are erasing profit, first high feed cost but also a huge increase in pork production. World Agriculture Outlook Board Chairman Gerry Bange is increasing his production forecast for pork in 2008 by 400 million pounds to more than 23.5 billion pounds, and increase of 7.3% increase.

"What we've seen of late is an increased pigs per litter, which we believe relates to the success of the circovirus vaccine," Bange says. "Not realizing or not knowing that the circovirus vaccine would be so effective, producers actually increased their farrowings, so all of this is resulting in a fairly sharp increase in pork production in 2008."

With that sharp increase in production comes a sharp decrease in expected hog prices. From $47 a hundredweight in 2007 to less than $41 this year.

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