Hog prices still down
Fri, 18 Sep 2009 21:12:29 GMT — Pork producers have seen better days.
According to an article in the Wall Street Journal last week, hog prices are down 44 percent from their peak last year.
That's because an oversupply of hogs and overseas fears of the H1N1 virus, especially in China.
KHQA's Rajah Maples spoke with an ag expert about what's happening with the swine industry and what needs to be done to stabilize the market. Ag expert Mike Roegge said, "Economists from Missouri have actually indicated over the last two years, producers have lost an average of $17 a head. They expect that to continue for another 10 to 12 months based on futures prices for hogs and grain prices for feed."
Mike Roegge with the University of Illinois Extension office says swine producers, which initially increased their sow numbers for exports, have been slapped with a double whammy the past two years. The first hit came when corn prices soared to $6 1/2 a bushel, which is the animal's main food source. Those prices have dropped 100 percent, but then came H1N1 fears -- mostly which came from China. Roegge reiterated that you can cannot get the H1N1 virus from pork.
Rajah said, "I'm hoping everyone knows that by now."
Roegge answered, "Well, in America, it's much more knowledgeable. We have a science base and opportunities to provide education through media. Overseas, that's just not the case. We see a 50 percent reduction in exports to China. That's been the major swine market for pork in the U.S."
Roegge says not every producer is going to lose $17 per head -- some will lose more, while some will lose less all depending on whether those producers are under contract with a larger entity such as Cargill, which is a food processor.
"In those cases, those producers have not lost money," he said. "They pay "x" amount of money based on the contract, but the producers who still own their hogs who are buying their feeder pigs, they've lost big time over the past two years."
Experts say it's going to take a liquidation of the sow herd and less production to help stablize the market. And Roegge says less swine production will eventually mean higher prices down the road. By the way, we receive calls and e-mails from time to time from local pork producers asking us not to use the term "swine flu" when talking about the H1N1 virus.
Here's KHQA's policy on that - a week after the illness surfaced last April, we decided and mandated a ban of that term in our local reporting.
We've also done several stories the past several months trying to educate the public about how you *cannot* get the H1N1 virus from eating pork.
But here's the catch, we run several national stories that come from the CBS Network and CNN that we have no control over.
That's why you might hear a story that uses that term on our broadcasts from time to time.
We also asked Roegge about the outlook for corn and soybeans.
He told us those crops in our area are about two weeks behind in maturity.
He says the best growing conditions for corn is about 86 degrees during the day, and we just didn't see it get that hot during July and August.
Roegge says June had the best growing conditions and that an early frost is the last thing these crops need.
Usually in our area, the first frost hits in mid-October.
Crop experts hope that won't come until the first of November this year to help corn and soybeans.
Other than that, he says crops are doing pretty well.Roegge said, "The USDA has reported that we're going to have the second highest corn yields on record, and the highest soybean yields on record. We're going to be ending the market year, which is at the end of this month with probably the lowest amount of soybeans that we've had that I can recall."
Roegge said low corn prices tend to be good news for livestock producers, ethanol plants and consumers, but not-so-good news for corn farmers.