market adjustments

Mark Greenwood
March 2008 

It is not getting any better – The losses are continuing in the swine industry. This past month feed prices kept going up while hog prices improved some but not near enough. Losses in the open market are still close to $40 a head and everyone keeps wondering when will it get better and what do prices have to get to before we start getting profitable? Well, the first thing we need to do is to somehow get supply reduced. The last cold storage report shows that we have an abundant supply of product. Even though exports have been very good we need to reduce supply to get any significant improvement in prices.

One of the most revealing quotes I heard recently was “What would we be talking about if we didn’t talk about ethanol?” No doubt it is the elephant in the room for most livestock producers so it is important to spend some time on it but there are so many other interesting and important topics flying under the radar of the ethanol intoxication. We need to and will break out of this fixation and take a wider view soon. Regardless, here are some thoughts about the ethanol situation as it impacts corn prices and cost of production for pigs just to make sure the groundwork is set for future comments.