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Senior Contributor

Hog prices to 'soar' in 2011?

That's the latest from a report from Chris Hurt this week:

 

“Foreign buyers are expected to elevate pork exports by 10 percent,” says Chris Hurt, a Purdue University Extension economist, in a university report. “Pork exports are expected to represent a record 21 percent of domestic production. The combination of modestly lower production and higher exports means that the available supply per person in the United States will drop by nearly 3 percent in 2011. This will be the foundation for record retail pork prices as there will be less pork available at a time when U.S. consumers economic conditions are improving.” 

 

What do you think? 

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13 Replies
Veteran Advisor

Re: Hog prices to 'soar' in 2011?

Don't know about those 'foreign buyers' and what impact they might have but a marketing newsletter I just received tonight mentions all the "swine barns that sit empty and rusting in Ontario" and I will add I could show you 3 sites that had swine barns on them just 8 months ago and are cleared now. 2 look like fields the 3rd is waiting for spring to do the final leveling.

Also my barns are empty as of last October and are mostly gutted.

1 will be torn down in the future the other converted for other uses.

Point is there will not be as many pigs coming out of Ontario in the future and I expect it is true of Canada as a whole.

I would also add that pig prices will have to be high relative to historic levels just to break even with the price of feed. 

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Veteran Advisor

Re: Hog prices to 'soar' in 2011?

I'd think it would be important to know what Mr. Hurt is basing his presumptions expressed in the statement "at a time when U.S. consumers economic conditions are improving" on before putting much stock in this predictin. Maybe SF staff could get him to comment on that.

 

Savings rates are going up rapidly. People are paying things down.  My observations from the past couple of months (purely and most admitedly anecdotal in nature) indicate restaraunt patronage is down considerably. Employment numbers are edging up but compensation packages and  hours worked per employee are eroding.

 

My base instincts would look for a glass ceiling on retail fresh meat prices. Maybe not....and if they do go through it and product continues to clear that just may be a reliable sign that the economy was in fact improving.

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Senior Contributor

Re: Hog prices to 'soar' in 2011?

Well I hope they are right.    We are getting ready to call it quits.   Should be done farrowing by the middle of April.   Will sell all of the boars next week.   No turning back now.     Would be nice to quit on a high note. 

 

Reasons we are quitting:   1.  Labor.... trying to find people willing to work with and do a good job.

                                                  2. Getting older.   We are now both over 55.   Still in realtive good shape.  

                                                  3.  Tired of the red tape and regulations.  EPA, PQA, TQA, site evaluations,  FICA, and etc.

                                                  4.   Money ,  with current crop prices we will make more money selling crops only

                                                  5.  Desire for time off.   No real vacations since 1987.  

                                                         2 1/2 days is the longest both of us can be gone.    Plus with elderly parents here

                                                        on the farm  we can't leave them with pigs.   Can't really leave them alone in bad weather either. 

                                                       (hope that is dealt with by the time the pigs are gone)

                                                    6.  Buildings are getting older and need some maintance.  If we spend the money to fix then we    

                                                          feel obligated to keep going.   No second generation here to keep them going.    

 

We aren't absolutely certain we are quitting for good.   We are still putting out feelers about feeding other farmers hogs.  We would prefer a farmer rather than a corporation.    Or maybe buying feeder pigs.    Just know there will be no more sows.  I'm too old to fight 600+ lb sows anymore.  

 

Good luck to those of you still sticking it out. 

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Senior Contributor

Re: Hog prices to 'soar' in 2011?

Didn't I just put a post up about Dr. Hurt a few months ago with him saying something I thought was too predictable?  I had Chris Hurt for a prof when I was at Purdue.  He's a very good teacher and seems like a very intelligent individual.  We had an article about the farm in one of the big magazines.  The reporter used Dr. Hurt as one of the industry experts for a perspective on our operation relative to the industry since I had him as a professor while in college.

Maybe I'm in a strange place but my experience would say that the restaurant trade isn't in a downward cycle.  There was a time when we really had to work to continue growth in our business but not so much lately.

Realistically, at the cost structure now days don't pigs have to go to a new plateu if there are to be any pigs left in the US?

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Veteran Advisor

Re: Hog prices to 'soar' in 2011?

Greg...would it be innacurate to say that your products most often find their way to upscale establishments that would have a  clientle that would be more insulated from a downturn? They don't serve duck at BK or Applebee's. I've ever seen a sustainable or free range claim on the menu at Perkins or Wendy's.

 

I beleive Chiploltle is the only chain outfit where I've  ever seen source claims.

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Senior Contributor

Re: Hog prices to 'soar' in 2011?

Sorry to hear that you are quitting farrowing. What made you consider selling all instead of downsizing? Has the regulation amount made it seem that getting smaller is not worthwhile? Many swine buildings were built in the 80s and are almost at their end of useful life without major repair. Would that major renovation cause more regulations for your farm? Is the caretaking of the elderly parents going to replace your time and energy of the swine operation? If so, are you going to have a real vacation? Are capital gains taxes part of the reason, too? Realize I'm not criticizing your decision, just trying to understand the reasoning behind it. Am still farrowing sows, not nearly as large as yours. Stupidity of youth makes a difference too.Smiley Wink

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Senior Contributor

Re: Hog prices to 'soar' in 2011?

Very accurate comments Bruce.  But I hear people saying that fine dining has taken a downturn and while we had to work harder for sales right after the economy tanked it hasn't been that way since summer.   We don't really sell to any chain restaurants.  We do sell to a couple of the big hotel chains but its flagship restaurants in big cities and not to the chain per se.  I'm working on Chipotle but they still laugh at us for our lack of ability to sell them pallets or preferably truck loads of product at a time.

We hired a person to deal with USDA so I can get back to taking care of real work.  Its kind of refreshing and it seems like USDA is much happier.  The whole agency perspective that a non-compliance is a non-compliance whether its one feather on the floor in a kill room or a complete failure of a HACCP plan kind of rubs me wrong at times.  Its best I turned that over to someone else.

I found a partial set of berkshire boars.  I found a guy in Michigan that had raised some purebred durocs with two purebred berks.  They had used pretty good lines for the sires and I'm happy with how they looked.  We sorted out 70 gilts for them yesterday.  We'll turn them in with the boars in 21 days.  That will get us over the 200 sow mark.  I need 300 to talk seriously to Chipotle. 

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Senior Contributor

Re: Hog prices to 'soar' in 2011?

We are 200 sows farrow to finish.   And we have 1000 crop acres.    10 years ago we had 500 acres.    We have kept adding crop acreage and not cutting down on hogs.   #1  reason for quitting is inability to find and keep quality help.   As you know our fulltime employee of 7 years was seriously hurt in July.    When he does come back  so far he is only cleared for light field work.   That is not feeding sows, or sorting and loading hogs.   Husband and I have been doing most of the hog work for the past 6 months.    We were unable to keep the hog work kept up and get through harvest with part time help.   The wheels were starting to come off.   (Sows not in farrowing crates on time,  new help not knowing anything so we had to backup constantly),  We had been contemplating quitting for the past 2 years.    Employee getting hurt and higher crop prices sealed the deal. 

 

Finding quality labor is Hard.   Yes,  they want to drive our 2 cabbed tractors.   But, getting dirty, and stinky is not wanted.    The excuses, the drama of their family life,  and other stories can fill volumes.    We are tired of fighting it. 

 

I had suggested to my husband several years ago that we drop the group of sows that would farrow spring and fall.  He just couldn't fathom not having all the finishing pens full all the time.     Our finishing, farrowing and nursery were built in the 70's.  They have been maintained and remodeled several times.    No real big things.    We need new curtains, some ventilation fans need to be replaced.   Some concrete slats have already been replaced.     Fencing of course is an on going thing.    Will hate to give up hog manure.    But,  with several neighbors with limited acreage for spreading we might be able to work out some deals.    We do have 3 feedlots that hold 100 hogs each, and all the sows are housed outside.   EPA.

 

The in-laws were going to move to assisted living this winter... but backed out.   They are 85 and 82.   MIL has real dementia problems.     FIL is not as sharp anymore either.     Their overall health is not good.   Canes and walkers are used.   Seeing either go up or down 3 steps in a scarey sight.      They have said this will be their last winter on the farm.    When we don't have hogs we will have to set a weekly schedule to go and see, eat with and take them places.    So far FIL can drive but it won't be much longer.    We are getting a newer combine this year  so we have no intentions of letting him drive it.    Not being in the combine might kill him anyway.    So it will be better if he is in town where he doesn't have to be reminded everyday. 

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Contributor

Re: Hog prices to 'soar' in 2011?

Suey, something going on around here is the price of scrap metal. A two ton truck of 4 tons brings in a 1000 bucks. At that rate I hope the packers own plenty of their hogs they are going to need them. I have never seen people so bitter about the direction of the livestock industry. At the funeral home one producer said he heard on the radio crop farmers should help these livestock producers, his remark " I'll help the ba----- all right, right to bankruptcy. He exited the dairy buisness. I think the Chris Hurt thingy is a sighn of desperation. People including me are just fed up with the            that goes on. No money in the industry just money down the road. Well, that pile of old hog slats in the farrowing house didn't depreciate as much as I originally thought. Payday. Oh I think the price will go to record highs in the grocery stores. Let the consumers pay, I could care less.

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