Lee Schulz, Extension livestock marketing economist at Iowa State University, says good prices usually result in expansion of the hog herd. However, that subject is up for debate.
“I think we are equally likely to see expansion or contraction,” he says. “Right now, there is a lot of incentive to expand.”
Schulz says prices in 2021 are the highest since 2014. He says prices are likely to go lower in 2022, but should remain “historically strong.”
The big concern, he adds, are production costs. “Costs were 30% higher in 2021 than in 2020,” Schulz says. “We expect those to hold in 2022, and we’re not just talking about feed costs. We’re talking labor, energy, services, machinery, etc. Those inflationary costs are here to stay.”