The National Pork Board hosted a teleconference Thursday afternoon with economists, following release of USDA’s first-quarter Hogs and Pigs report. Continued losses are predicted for now, but margins will likely improve going forward into the second, third and fourth quarters of 2013.
Livestock economists aren’t painting a rosy picture for 2013, but at least it should improve from what producers experienced last fall and in the first quarter of this year. National Pork Board hosted a teleconference Thursday afternoon, following release of USDA’squarterly Hogs and Pigs report. Continued losses are predicted for now, but margins will likely improve going forward into the second, third and fourth quarters of 2013.
Participating on the speakers panel were John Nalivka, President, Sterling Marketing, Vale, Ore., Victor Aideyan, Senior Risk Management Consultant, HISGRAIIN Commodities, London, Ontario, and Jim Robb, Director, Livestock Marketing Information Center, Denver, Col.
“Producers were losing about $32 per pig in March,” says Nalivka, “I think we’ll continue to see losses but they should fade back as we get into June. If we go from losing $32/head in March to losing $10/head in June, it’s going to have a lot to do with where the industry is headed in terms of sustaining any growth.”
Aideyan says one of the industry’s redeeming factors is its level of efficiency. “We have an industry that has been able to do more with less,” he says.“We’ve seen higher efficiencies, and this report confirms that the trend is continuing, with a 1.1 percent increase in efficiency for this quarter.
“Looking forward, we can expect larger numbers going into the second quarter and beyond,” he continues. “We have to ask ourselves the question: The industry is efficient and is getting better, but we’re seeing tougher prices with increased supplies.”
Aideyan says it’s difficult to interpret this report along with corn acre plantings, because everything will change on Monday morning when corn futures open up, and lower corn prices that might affect producers’ attitudes toward expansion. At least, in his opinion, the industry is holding the line rather than pulling back.
“The anticipation is that we could end up with a pretty big crop this year,” says Nalivka, “But if we don’t have enough moisture and the drought carries on, a lot of that talk will go away.”