Feed accounts for about 60 percent of the cost of raising hogs, and corn often accounts for half of those feed costs. Corn prices rose from less than $1.80 per bushel in the fall of 2005 to $7 in mid-2008. During that period, breakeven hog prices went from $38 per hundredweight live to $60 per hundredweight.

Since summer, corn prices have fallen by half. USDA’s forecast for 2009 is that both feed use of corn and corn exports will be down. Corn use by ethanol plants is expected to increase but a bit more slowly than in recent years. For the first time since 2005, feed costs are expected to show hints of stability.