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Losses, trade tensions giving pork industry déjà vu  

An ag economist says pork producers could face losses this fall that haven’t been seen since the late 1990s.

Purdue University’s Chris Hurt says although hog prices were never recorded as zero, there were no bids for farmers who wanted to sell hogs for immediate delivery in the fall of 1998.

Hurt says current estimates for losses are not as bad, but there is still a lot of price uncertainty.

“We were looking at losses in the fourth quarter of 1998, on my estimates, of about $45 a head,” he says. “Six weeks ago we were thinking we could approach that this year, but it looks like the losses in the fourth quarter will be about $30 a head.”

He tells Brownfield another parallel to 1998 is that the government is making direct payments to pork producers.

Pork producers received payments in 1999 because of the losses, and this fall producers are eligible for payments from the USDA to help them weather weak prices caused by retaliatory tariffs.

“The trade assistance package for hogs is $8 per head of inventory, on half the inventory, so that cuts that down to $4 per actual head of inventory they had on August 1,” he says.

He says the payments will help, but they won’t make producers whole again. But, Hurt says he remains hopeful losses won’t be as bad as those seen in 1998.

Audio: Chris Hurt, Purdue University