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Advisor

only two likely answers

1. With good profititabilty and banks giving money away for free, there should be strong expansion.

 

2. If not then it is a classic oligolopoly and needs to be broken up.

 

3. Only caveat would be if enviro regs make expansion difficult. I'm not buying that, MW states are still plenty friendly even if there are some hoops to jump through.

In reality, for those who own sows, regulation is their friend if it slows expansion. Although I'm sure they would bellyache about their sorry lot in life if given the chance.

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2 Replies
Honored Advisor

Re: only two likely answers

First of all I don`t know what goes through those bigshot hog outfit`s minds, but these low interest rates can`t last.  It`s probably getting harder to find a willing pool of "hog house janitors" that have a half-a-mil to buy themselves a job that pays in manure.  Hog diseases really take a toll.  Many can still remember `94 and `98 that hogs literally can go to 10¢.  And even with "good pork prices" that $7, $8 corn took it`s cut too.

 

The whole meat complex is on thin ice, if you ask me, if the stock market pulls back and that "wealth effect" goes away, meat consumption could easily drop by 1/3 or 1/2.  The easy money has been made in most places.

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Veteran Contributor

Re: only two likely answers

Hog and pig report in a couple weeks will be interesting.  June report renigged on expansion but it has been in the process. Peak PED losses are now!    Where is all the media?  15-20% reduction in numbers!  Slaughter plants shutting down!

 

 

 $4.00 corn and $90 pork equals a fat hog.

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