US hog farmers rebound from 2023 losses - AFBF

US hog farmers faced significant losses of about $31 per head in 2023 due to high input costs, particularly feed and fixed costs. However, a decrease in feed costs and increased demand for pork, both domestically and internationally, especially from Mexico, have helped improve profits. Despite these gains, high fixed costs and inflation continue to pose a challenge. The USDA expects a slight increase in per capita pork demand in the US, supported by strong export demand. However, high prices of products like ham, popular in the Mexican market, could potentially reduce export demand. The CME lean hog index has been rising since early July, indicating higher prices for hogs.

US hog farmers faced devastating average losses of about $31 per head in 2023, according to a recent market report from Bernt Nelson at the American Farm Bureau Federation. Elevated input costs, particularly from feeds and inflated fixed costs, were responsible for losses. Iowa State University’s June 2024 estimate for returns to farrow to finish operations shows a profit of $8.82 per hog, up 133% from -$26.18 in the same time period in 2023. The majority of this difference comes from the 25%, or $31 per head, drop in the cost of feed from June 2023. Despite the much-needed boost from lower feed costs, the cost of fixed inputs such as fuel and utilities remain elevated from inflation. This will continue to be an obstacle to profitability while pork struggles to find demand. In its July World Agricultural Supply and Demand Estimates report, USDA estimates the annual US per capita demand for pork is 51 pounds per person. This is up 0.4 pounds per person from June projections and up ...