2014 Most Profitable Year for Pork Producers?07 January 2014
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CANADA - The chair of the Saskatchewan Pork Development Board says, thanks to lower feed costs, 2014 could be the most profitable year since 2006 for the province's pork producers.
As a result of drought that devastated the U.S. corn crop in 2012 North American feed grain prices spiked.
Florian Possberg, the chair of the Saskatchewan Pork Development Board, points out feed is far and away the largest part of the cost of raising a hog.
Florian Possberg-Saskatchewan Pork Development Board:
Toward the middle of 2012 we really ran into high feed prices that went on into 2013.
At times probably the first half of the year our producers were losing up 40 dollars per hog but we had an excellent crop this year and supplies are much more plentiful.
The world price of feed grain has come down quite a bit actually, probably about 30 dollars a hog and we've continued to see prices that seem to allow our producers to finally make a profit after quite a length of time where they actually lost money.
I think 2014 could very well be our best year since probably 2006.
That's based on the projections that our prices will remain somewhat equivalent to what they were in 2013.
Meanwhile we could very well see our feed cost be reduced by 30 dollar a hog, which is about 30 percent by the way, 25 or 30 percent.
So, if our cost of production goes down and our revenues stay at a reasonable level, 2014 could very well be a very good year for us as hog producers.
Possberg notes, not only have we seen the price of feed come down but the quality of the crop was much better in 2013 than in 2012 so we're also seeing fewer problems with light grains and toxins.
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