The pork industry is expected to have a profitable year in 2012! In fact, the level of profitability could be the most favorable during the high priced feed era. Profits in 2012 are currently forecast to be near $17 per head, which would be the highest since 2006. That was the last year of the low feed price era when corn prices received by farmers averaged about $2.30 per bushel for the calendar year and estimated hog profits were $27 per head.
While a return to profitability is welcome news, there are deeper and more important implications. The first is that the pork industry, like most other animal industries, has made the adjustments necessary to live in a world of high priced feed. The second is that the pork industry probably has “turned the corner” on high feed prices as one looks to 2012 with abundant and cheap feed wheat, prospects for moderation in the rate of growth in corn use for ethanol, the potential for a larger South American soybean crop, and hope for a return to higher U.S. corn and soybean yields. <Read More>
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