USDA is forecasting near-record corn yields in 2009, which has relieved some of the pressure on feed costs. Iowa State University data show that hog carcass prices usually need to be around $52 per hundredweight to cover all costs when corn averaged $2 per bushel.

USDA is forecasting that corn prices will average close to $3.50 per bushel in the next 12 months. This means pork producers will need carcass prices near $65 per hundredweight to break even. At the time of this writing, all lean-hog contracts except July 2010 were below that price. Pork producers have lost money 20 of the last 22 months. If the futures market is right, they are set to lose money 19 of the next 20 months.