FARM SECTION: Drought leads to high input prices, losses for pork producers

Posted: Feb. 11, 2013 11:42 am Updated: Mar. 11, 2013 12:15 pm

Herald-Whig Staff Writer

Stronger prices could help offset higher input costs for hog producers.

"The drought definitely meant higher feed cost," said Tim Maiers, director of industry and public relations for the Illinois Pork Producers Association. "We mention hay and pasture for cattle guys, but corn availability and the price of that corn and the soybean meal, two main ingredients, shot up dramatically."

That turned into significant losses for area pork producers, who hope for better things in 2013.

"If we have a normal crop again, feed prices should go back down again," Maiers said. "If it's a situation where it's another year of dry weather, a short crop, we'll be back in the same situation, or potentially worse. There's a lot of variability and volatility going into 2013."

Continued strong pork exports combined with prices projected to rise from $62 to $66 per hundredweight are "at least going in the right direction," Maiers said. "The big question remains what will grain prices do, and what impact that will have on feed prices."

Most pork producers also raise corn and soybeans. They'll use their own corn if they can, which helps save on feed costs, but "everybody buys soybean meal," Maiers said.

"Regardless of what grain prices do, we'll be in a better position here in the Midwest and Illinois. We do at least have a lot of corn and beans grown around us," Maiers said. "We have access to the grains more than North Carolina, Oklahoma and other places where we've seen pork production increased."