USDA Confirms No Expansion
The USDA released the September 1st Hogs and Pigs Report last Friday. It confirmed what most rational people would have surmised – NO EXPANSION! There are fewer sows, fewer market hogs, fewer sows farrowing, and a smaller pig crop. The relentless financial losses that producers had over thirty months have not been replenished by four months of profits. Only the Ag – economists who never owned a pig, but are experts on the market have been predicting expansion. News flash – Wrong Again. The same Ag – economists who predicted summer markets of 68 cents lean last January (out by up to $40 per hog), were the same wizards saw expansion. Have any of them ever talked to a real producer on banks general attitude on swine? There will be no expansion without bank support. Right or wrong bank support is next to non – existent. Why would there be if sow farms are valued currently a fraction of what they cost to build. The only interest of anyone to buy one is at around 20 cents on the dollar. Sow barns, are a lot of work – staffing, pig health concerns, proper size of the facility, etc… These all play into the no expansion scenario. Until sow units that sit empty start to be bought or refilled there will be no expansion. New sow units? Not until next year, but only if feed prices allow a profit margin. In the meantime small pigs will bring strong prices.USDA Hogs and Pigs Report
September 1st, 2010
2009 | 2010 | Per cent of 2009 | |
KEPT FOR BREEDING | 5875 | 5770 | 97 |
MARKET | 60842 | 59221 | 97 |
PIG CROP JUNE – AUGUST | 28718 | 28507 | |
SOWS FARROWING JUNE – AUGUST | 2959 | 2905 | |
PROJECTION September – November | 2915 | 2881 |
Categorised in: Pork Commentary
This post was written by Genesus