Rising feed costs, lower pig prices and over-supply are squeezing finances and pressuring pork producers' bottom lines. Future prospects for the industry were at the forefront of the 5,000 producers attending the 2008 Iowa Pork Congress last week.
"There's no doubt that economic challenges will be a big part of what we do in 2008," said Dave Moody, Iowa Pork Producers Association president, at the event held in Des Moines, Iowa.
Iowa producers suffered average losses of more than $25 for each hog sold at the end of last year, according to Iowa State University's estimated livestock returns. Most analysts predict that producers will see more red ink this year.
The IPPA has assured help to provide educational computer programs developed by ISU on managing risk, but turning around the hog market is beyond the association's power.
“The cost of producing a 270-pound market hog is up 12.3 percent compared with a year ago, according to ISU's estimated returns,” said Moody. Meanwhile, prices paid for the same 270-pound market hog have dropped 19 percent during the past year, mostly because of an increase in hogs brought about by the string of profitable months.
Steve Meyer, president of Paragon Economics and pork industry client consultant said producers will need to become steely-eyed, cold-blooded capitalists if they want to survive. "There are opportunities out there," he said. "Problem is, they are not good opportunities," he added.