US: Hog Farmers Should Return to Profitability in 2009 – if They can Survive

Under-pressure pork producers in the US should return to profitability in 2009 - as long as they can stay in business until then, analysts Rabobank have said.

Last week, Fiona Boal, Executive Director of Rabobank's Food & Agribusiness Research and Advisory (FAR) department, said the industry was currently in the midst of a ‘perfect storm’ as it battled to cope with high feed prices, an excess of hog supplies and concerns over whether domestic demand can hold up.

In many cases, hog farmers in the US have been in the red for the last nine months. But Ms Boal has added: "While the industry is undoubtedly being forced to adjust to a new, unique, and difficult, operating environment, a 1998-like collapse does not appear likely and those participants with the financial resources and management expertise to survive the next 12 to 18 months should enjoy renewed levels of profitability by the end of 2009."