After a grueling several months of losses, pork producers' returns may turn positive by this summer, says Kansas State University agricultural economist Rodney Jones.
Losses– return to labor and management– in February ran about $2 per pig on hogs leaving segregated early weaning nursery-to-finishing barns. But the losses were even deeper in March and April, coming in at $5 to $10 per pig.
But Jones expects hog prices to recover in the next few months – possibly enough to generate modest positive returns for pork producers by mid-summer.
"Break-even prices to cover total costs will increase to near the mid $40s on a live basis," he says. "However, average cash hog prices are projected to increase to levels slightly above those break-evens."
Jones also says that average farrow-to-finish producers can cover variable costs in the mid-$30s, but that they need prices near the mid-$40s to cover all production costs.
"Current cash equivalent prices are barely covering out-of-pocket costs, and have not generated enough revenue to facilitate equipment replacement or other costs for several months," Jones notes. "The situation is similar for the average weaned-pig producer. Pig transfer prices are barely covering variable production costs, with producer equity absorbing fixed costs."