Steve Meyer, with EMI Analytics, says if pork producers have managed their risk well – it could be another year of positive margins.
“If you take the average price of all the hogs that are sold across the different methods and put that across our cost model – we’ve got almost $20 per head this year,” Meyer said.
In addition, the pork industry is positioned to grow, according to Meyer. “The packing plants that are coming on are going to provide us some opportunities,” Meyer said. “I think that’s a positive. I think we have to be careful about irrational exuberance across 2018 and 2019 because we could certainly produce ourselves into a bad situation if we’re not careful.”
But, Meyer doesn’t anticipate pressure on slaughter capacity like the pork industry saw in the fourth quarter of 2016. “There are those kind of ‘black swan’ events that are out there that could happen,” Meyer said. “Barring that though, I think we’ll be reasonably tight this fall, but nothing like last fall.”
Meyer made his comments in an interview with Brownfield Ag News during last week’s World Pork Expo in Des Moines.
(Reporting by Meghan Grebner, Brownfield Ag News)