The major problem in the hog industry is not the supply of pork, it is production costs. Corn price near $4
per bushel and soybean meal comparably high have increased the cost of producing pork $12 to $13 per
hundredweight compared to 5 years ago. High priced crude oil resulted in high priced gasoline and high
ethanol prices resulted in high corn prices relative to the 35 years prior to 2008. In fact, the profit per hog
in the second quarter would have been $7 to $12 per head with $2 corn. In the June Hogs and Pigs report, the inventory of 180 lb. and heavier market weight hogs was relatively
close to the June slaughter. However, slaughter in the second quarter has been larger than indicated by the
March 1 market inventory when one considers the smaller live hog import from Canada. Hog weights
indicate marketings were not kept current in the second quarter with a year earlier by at least 2 days and
possibly 3 days. Barrow and gilt carcass weights for the most recent week in June were 4 lbs. heavier than
last year. The bottom line is that the June Hogs and Pigs report confirms our belief that producers need to reduce the
breeding herd another 5% or more to get the industry profitable.