Hog profitability has turned around in the last couple of months according to Dr. Steve Meyer with Ever.Ag. He forecasts break-even now at $85.
“Things have gotten much better. Back in December when I first estimated profits and losses for 2024, I had a minus $12 and change per head. That number, as of last Friday, is a plus $1.66. That’s nothing to write home about but it beats minus $12.”
Meyer estimates six months of profits; however, the average producer may be five to six dollars higher on cost.
“Still, the direction is right. It’s coming off a terrible year last year. In fact, by the model, last year was even worse than 1998 was and yet we’re kind of headed in the right direction. So, it’s kind of a breath of fresh air as we go through late winter here.”
Meyer says there are only three things that could bring back profitability: costs have to go down, demand needs to improve, or supplies need to be cut.
“Well, we’re getting two of them for sure. We’re certainly getting lower costs. And as you look at the USDA Ag Outlook Forum last week and the acreages they’ve got in and yields they’ve got in and the carryout- I mean, 350 million bushels of beans and 2.5 billion bushels of corn- we’re going to get a break on costs here, probably more than we’ve seen.”
Meyer says demand may get better. Exports have been great.
“Global Agritrends and USMEF think we’re going to be up another 4%-5% this year, the Mexican peso is strong and that’s our number one trade customer. So, I think the export side is going to be good. So, I think we’re going to pick up some on cost and some on demand, maybe.”
Meyer adds he doesn’t anticipate supplies or the sow herd getting cut and productivity is up.
Source: NAFB News Service
