Purdue University Extension economist Dr. Chris Hurt, predicts hog and pork prices will launch to record highs in 2011 due to a combination of high demand, high feed costs, and a smaller herd. Foreign buyers are expected to elevate pork exports by 10%, representing a record 21% of domestic production. As a result Hurt predicts this year that the available supply per person in the United States will drop by nearly 3%. That will cause consumers to face record retail pork prices.
For producers, Hurt predicts live hog prices to exceed $60 per live hundredweight, or more than $80 on a lean basis. Historically a $90 lean price, or about $67 live, was the top of futures markets. Some current futures prices now exceed $90 for the spring and summer delivery contracts and raise the possibility of them reaching $100, or $75 live.
The Purdue economist notes that a new era of high costs probably means there will eventually be a new era of record high hog and pork prices. According to Hurt feed costs aim toward a break-even year with costs estimated to be slightly over $60 as well. So, there will be no great profit prospects during 2011.