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Monday, January 22, 2018

Cheap corn bad for Iowa farmers, good for hog producers

Iowa Soybean Association photo
Higher pork export profits combined with low-cost feed have prompted a boom in swine barn
construction in Iowa, where a third of U.S. hogs are raised. Permits for hoghouses in the state are at a five-year high, according to data from the Iowa Department of Natural Resources

Hog feed is attractively priced because U.S. corn prices are around $3.50 a bushel, almost $1 less than three years ago. Meanwhile, rising incomes in China, India and other nations have increased global demand for pork. U.S. hog farmers have been quick to respond, increasing the U.S. hog herd to an all-time high of 73.2 million head as of Dec. 1, 2017, up 3- to 4 percent in one year.

"DNR’s 2017 statistics showed that approvals for construction of new hog barns capable of holding more than 1,250 head, and expansions of existing ones totaled 451, up nearly 12 percent from 2016," Theopolis Waters reports for Reuters. "The U.S. hog herd reached an all-time high 73.2 million head as of December 1, 2017, according to the U.S. Department of Agriculture."

New meat packing plants are keeping pace with the increased hog population. "Industry slaughter capacity in 2017 grew 8 percent vs. 2016 after new or revamped facilities came online in Minnesota, Michigan, Missouri, and Iowa, said John Nalivka, president of Oregon-based Sterling Marketing," Waters reports. "He expects capacity to rise another 6 percent in 2018 when another Iowa plant comes online."

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