Several market factors have come up positive for the pork industry, says Chris Hurt, Purdue University agricultural economist. He notes that live-hog prices have responded in an upward manner.

Of course, there are several factors that have to line up, but higher prices look more likely for the lean-hog futures markets, especially into 2006, he says. 

"Maybe the biggest positive news for the industry came Aug.12, with USDA's August Crop Production report," Hurt notes. "That report suggested that the nation's corn crop would be greater than 10 billion bushels, providing sufficient feed stocks with no need to ration usage."

Soybean production was viewed as barely sufficient to meet upcoming usage with only modestly higher prices than for last year's crop. Final yields will still be important for meal prices. The reduction in prices from mid-July highs to today is more than 50 cents per bushel for corn and about $55 per ton for soybean meal.

Hurt says the overall corn and soybean meal impact on anticipated production costs is $4 to $5 per hundredweight lower. Costs now look to be around $40 per hundredweight, with live-hog prices during the next year averaging around $45 to $47 per hundredweight. 

Chris Hurt, Purdue University