Jim Long Pork Commentary, U.S. Cash Corn Lowest since Fall of 2020, February 12th 2024


If you own hogs last while you were inflicted with high feed prices. As the saying goes, “The cure to high prices, is high prices”. Cash corn reached $8.00 a bushel in this corn cycle; much was sold in the last four years over $6.00 driving up swine cost of production leading to a swine industry financial debacle. Last Friday U.S. National Cash Corn averaged $4.08 a bushel almost half of the corn cycle high. This is the lowest price since the fall of 2020. Four years ago. Welcome relief.

Lower corn, soybean, barley costs are being seen across the world. Not just the U.S. lowering all swine producer’s costs of production. The world has produced more grain and oilseeds as farmers reacted to the higher prices.

  • The January 1st Cattle Inventory indicates the U.S. Beef cow herd is 28.2 million down 2% from a year ago. The U.S. inventory report started in 1972 – 52 years ago. The 28.2 million is lowest ever recorded. The U.S. population was 210 million in 1972. In 2023 population 339 million. Less cows, way more people. Cash cattle prices jumped 6¢ lb. last Friday from the day before. Beef prices in 2024 triple pork prices (Choice Beef cut-outs $2.94 lb. – Pork cut-outs 86¢ lb.) will support hog prices.
  • The European Swine Industry has hog slaughter data indicating a 7.5% decline in the first ten months of 2023. Less pork has led to 20% decline in pork exports. 3936 down to 3152 million metric tonnes. In same time period the U.S. exported 2.5 million metric tonnes. The price of pigs in Europe continues to be significantly higher than U.S.-Canada-Brazil. We expect pork exports to continue to increase from these countries relative to EU. Year to date U.S. pork exports up 4% with strong sales booked for future delivery.
  • DTN – AgDayta does a calculation on Gross Packer Gross Margin. The latest is $45 down from recent $55. Last year same time it was about $30. The current good Packer margins is all you need to know why Packers are aggressively running big harvests. Make money, kill hogs. If hog numbers begin declining soon as we expect as a result of the sow liquidation that began in earnest last May the current big gross Packer margin will erode and hog prices could increase rapidly.
  • The latest weekly U.S. sow slaughter data was 70,622 a big number. Anything over 58,000 a week is liquidation level. The U.S. sow herd continues to get smaller. We suspect U.S. herd down 350,000 from its peak 1.5 years ago. No doubt there will be less hogs in the future year over year.
  • We adamantly believe there will be fewer hogs marketed in U.S. in 2024 than 2023. There have been productivity gains from less PRRS activity (but we don’t believe it can overcome a sow herd decline that will be over 6%). The history of our industry shows financial losses lead to fewer hogs and return to profitability. The financial losses in 2023 are the greatest in over 20 years. We believe history repeats itself.

The USDA doesn’t agree with our premise. In their February Quarter Animal Product Production report, they indicate 2024 Pork Production will be 27,880 million lbs. up from 2023 of 27,031 million lbs. (2022 was 26,996). The projection for 2024 is a 3% increase over 2023. We have never increased pork production in our history after multiple months of losses. We will stick with history and the knowledge the sow herd continues to decline at epic levels. To date U.S. pork production is -0.1% lower than a year ago.


We have our belief on hog production for 2024 so does USDA. We all want to believe the numbers that suit our narrative. Packers want to believe the 3% increase, but we suspect their aggressive search for hogs indicate the lowering of supply. Producers hope we are correct in our premise.

Who knows. USDA has vast resources with well-paid experts you would think they can get it right and maybe they are. Our premise is based on history and the reality we and most have been living. An industry gassing an average $75 million a week for 16 months.