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2015 Should Be Profitable for Hog Producers

Large feed supplies, low feed costs and a smaller swine supply should equal good news for hog producers.

2015 could be a very good year for hog producers, North Dakota State University Extension Service swine specialist David Newman says.

He is optimistic for several reasons:

  • The projected corn crop of nearly 14.4 billion bushels will be a record, and the U.S. soybean crop is expected to total 3.9 million bushels, which means a good supply of low-cost feed will be available for hogs.
  • Recent corn and soybean meal futures prices put average farrow-to-finish costs below $68 per hundredweight. That would be the lowest annual average cost since 2007, when it was $62.72.
  • The August rally in lean hog futures, combined with the low grain prices, raises the estimate of average farrow-to-finish profits back above $40 per head for 2015. The October, November and December 2014 margins are at $54, $42 and $44 per head, respectively.
  • The number of porcine epidemic diarrhea virus (PEDv) cases fell significantly this summer as expected, but total losses of hogs since PEDv was discovered in the U.S. are in the millions. Plus, cases of PEDv likely will increase this fall and winter, which could lower the supply of hogs in 2015 and keep hog prices at profitable margins.

The virus has killed as many as 7 million U.S. pigs since it was discovered in the country in May 2013. The mortality rate in piglets from herds not previously exposed to the PEDv is nearly 100 percent.

“Although we will most likely see an increase in PEDv outbreaks this winter, it is doubtful that we will see the number of losses incurred in 2013-2014 to date,” Newman says.

The key to preventing the disease from spreading is good biosecurity, according to animal health experts. That involves making sure the swine barn is clean and virus-free, and establishing a line of separation between the clean area (the barn) and the dirty area (anywhere outside the barn). It also includes washing boots and clothing before and after being around swine, and cleaning and disinfecting vehicles used to transport pigs.

“Producers who are able to maintain herd health and practice good financial management most likely will have a good year in front of them,” Newman says.

NDSU Agriculture Communication - Sept. 16, 2014

Source:David Newman, (701) 231-7366, david.newman@ndsu.edu
Editor:Ellen Crawford, (701) 231-5391, ellen.crawford@ndsu.edu
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