Bring Home the Bacon
After at least two years of massive losses, hog farmers are now starting to enjoy much higher prices for their products. Most of the studies I have reviewed indicated that most farmers that raised hogs probably lost anywhere from $20 to $60 per hog produced in 2008 and 2009. Based on the higher current prices, I would estimate that they are making at least this much per hog raised right now.
During 2008, the hog farmer had a double whammy of low price for their product and much higher feed costs. Right now, they have a high price for selling the hogs and feed prices have not rallied too much (as compared to 2008).
Prices for pork bellies which makes up our bacon have risen about 72% in the past year to around $1.43 per poundaccording to an article I read in this Kokomo, Indiana newspaper. Bacon prices have averaged more than $4 per pound which is the highest price since at least 1980 (although on an inflation adjusted basis, it is still much lower than 1980).
This is a good article to give you perspective on where the pork industry is at right now.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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