By DAVE BLOWER JR.
Farm World Editor

DANVILLE, Ind. — To paraphrase an old saying, what’s good for the grain farmer isn’t always good for the livestock producer.

Purdue Ag Economist Chris Hurt attempted to calm the fears of dozens of pork producers who were interested in his outlook for 2011 during the annual Midwest Pork Conference. This year’s gathering was at the Hendricks County Fairgrounds in Danville.

Hurt said a variety of factors – all out of the control of livestock farmers – have converged to drive per-bushel corn prices higher. He suggested that there’s a one-in-three chance that corn could hit $6 per bushel next year.

“If the hog industry doesn’t expand, I think we can handle $5 corn,” Hurt predicted.

The popular Purdue speaker said corn averaged $2.04 for eight years between 1998-2005. Since then, it doubled to $4.08 per bushel. In 2008, due to the high supply of pork, hog farmers suffered as prices dropped and costs went higher. However, pork producers have cut supply enough since 2008 that prices have rebounded, he said.

“An industry can affect supply,” Hurt explained. “If you cut supply enough, that will raise the price. I know many of you (pork producers) were planning to expand in the second half of 2011, but I think those plans should be delayed. The universal message here is get your production level down.”

He added that hog farmers shouldn’t have to face some of the challenges of 2009, including consumer fears of H1N1 and increasing demand from ethanol makers. Hurt also believes the recession in the U.S. economy may be subsiding.

“We have cut this herd industry-wide,” he reported. “Easily over the next year, I think we can handle $5 (per bushel) corn and still make money raising hogs.”

He explained the U.S. dollar is lower in value in the world market, and that will help U.S. exports. Though meat consumption in the United States is waning, demand for U.S. pork is strong overseas.

“If we’re going to grow our market, we’re going to have to go overseas,” Hurt said.

“There’s your growth potential.”

He predicted that live weight prices for hogs will be between $53-$54 during the first two quarters of 2011. The prices could spike to $56-$58 during the third quarter.

As corn prices begin to stabilize this time next year, he said pork live weight prices in the fourth quarter of 2011 could be between $50-$52 if there is little or no expansion.

“You have control this time; you didn’t have control a few years ago,” Hurt told the pork producers.

“The good thing about $5 corn right now is that it stops expansion before it gets started. Your limited supplies are going to give you enough to compete with $5 corn.