U.S. pork producers can look to add another 6 to 12 months of profits to the 20 they've already experienced. That's the word following USDA's September Hogs and Pigs Report released on Sept. 30.
Ron Plain, University of Missouri ag economist, projects it will be fourth quarter 2006 before red ink starts to filter back into the production sector. Robin Fuller with Tallgrass Consultants gives producer profits another 6 to 9 months.
While production looks to be holding steady well into the middle of 2006, demand will be the weak link. Tremendous domestic demand is what's driven the industry's extended profitability. But the high-protein diets and other meat-related issues look to be shifting. "I'm estimating that Japan and the Pacific Rim will open to U.S. beef at some point in 2006," says Fuller. She expects U.S. pork exports to decline in the second half of next year.
Based on carcass-weight prices on a per hundredweight basis, Plain and Fuller offer the following projections:
Plain Fuller 4th quarter 2005 $60-$61 $61-62 1st quarter 2006 $62 $61-$63 2nd quarter $64-$65 $66-$67 3rd quarter $58-$60 $60-$62 4th quarter $50-$52 $51-$55