Producer profits have been whipsawed by both hog prices and feed costs in recent years. Fortunately, three record corn crops in the past four years have brought corn prices down to a level that is easier for the livestock industry to live with.
Corn prices are less than half of what they were four years ago. Lower feed costs mean lower cost of production and better profits for hog producers. Iowa State University calculations put break-even hog prices in the low $60s per cwt of carcass and mid $40s per cwt of live weight.
The outlook is for steadily rising corn prices as crop farmers curtail corn acres. In the short run, this summer’s weather and the size of this fall’s corn harvest are crucial to feed costs.