American hog farmers are caught between higher prices from growing exports and the higher cost of feed due to lower South American corn and soybean production and weather concerns for U.S. crops.
In the first quarter of 2016, U.S. corn farmers got $3.60 per bushel and the cost of protein meal in Decatur, Illinois, was at $276 per ton. Today those prices are at $4 per corn bushel and nearby meal futures are at $400 per ton.
Chris Hurt at Purdue University said hog prices are getting a fortunate boost thanks to increasing pork demand in China. A recent herd reduction due to poor margins created a retail shortage and prices are at record highs. China will soon likely take the place of Japan as the world’s top pork importer. USDA forecasts exports to grow by five percent this year to 5.2 billion pounds, and that number could go higher as China’s imports continue to grow.