Economist Dennis DiPietre shared his insights on the cost of production and profitability in the U.S. pork industry during the Boehringer Ingelheim North Carolina Health Seminar last week. Dennis is a frequent guest speaker at this event because he always entertaining and enlightening.
His main point this time was “all the world is a distribution” which he used to illustrate the need to look at averages rather than single point prices when making economic decisions. “Today’s price isn’t any good after today, it’s bound to change,” Dennis said. “As you’re thinking about the future, you have to ask yourself…do I expect the pattern of the last year to repeat itself, the last five years, or will we be going back to a longer term sort of pattern?”
Dennis does believe that the hog industry is coming into a period of pretty good profits in the next year. “But people … should really begin to think in the long run about seeing prices of corn, bean meal and hogs as distributions, not as annual averages,” he said. “The most important thing you can do to try to ensure profitability is to try to manage margins by using a good hedging program.”
Listen to my interview with Dennis here: Interview with economist Dennis DiPietre
