The Hendricks County Fairgrounds was the site again this year for the Midwest Pork Conference on Tuesday.
The day kicked off with an economics update from Joe Kerns with Kerns & Associates, an agriculture risk management company based in Ames, Iowa. Kerns says African Swine Fever has been a positive influence on the hog market; however, “The product is moving and it’s moving at higher prices. The issue that we have is (the profits are) stopping at the processing side of the business.”
And Kerns doesn’t blame the processors.
“They are having animals fall in their lap. They’re able to procure those at relatively decent values and still garner the higher prices from increased demand, both domestically as well as what we’ve seen with the export side of it. So, I would call our biggest problem right now is just waiting for the ship to come in that that holds a boatload of promise…that brings us higher prices. We’ve just not seen that matriculate down into the producer level for quite some time.”
As for strategies moving forward, Kerns says he believes that the optimism built into the futures market is real, but, at the same time, there are a myriad of strategies available to take some profitability.
“We’ve got someplace in the neighborhood of a $35-$40 per pig sitting on the table right now and I do believe that we’ve got to participate at some degree in that. 25%, 30%, 40%- whatever that number is that makes you and your financial community happy. Then, after that, if you want to bank on a little bit more optimism, have some structured sales goals in as the market moves higher, so maybe perhaps you’re selling your last 25% of your pigs at the high of the market. There’s no shame in doing that. We’ve got some very profitable opportunities looking forward.”