We asked you about estimated 2013 hog prices in our online poll, and the results were all over the board. Most of you (38 percent) believe live hog prices will be lower this year, but so will input costs, so profit margins will improve. Twenty-seven percent of those responding agreed with the statement, “Live hog prices will be lower and profit margins will be worse or the same, given input costs.” Another 21 percent believe live hog prices will be higher, while 15 percent aren’t sure.
Most “experts” are unsure too, given the variables involved:
- Drought: It’s raining in the Midwest as I write this – farmers are hopeful drought concerns will be put to rest this year
- Exports: A number of our trading partners have restricted U.S. pork because ractopamine is used in some operations, even though it’s proven to be safe
- Strengthening dollar: While a stronger dollar could negatively impact our ability to be the chosen trading partner, it also means that domestic incomes should improve, with more dollars spent on protein
- Energy: Gas prices are high, and with high unemployment, many families struggle to make ends meet so they’re looking for low-cost food options
The factors are inter-related, and there are no easy answers. Producers need to continue to be good marketers and maximize efficiency.
Look for our new poll later this week.