Hurt said that while prices will increase to an average of about $63 per hundredweight in the first quarter of this year, $71 in the second quarter and $69 in the third quarter, producers will continue to suffer losses until spring.
"For the immediate future, losses will continue in the first quarter of 2013 and are expected to average about $15 per head," he said. "The return to profitability is expected to come in late-April or early May when the spring hog price rally is under way and as meal prices edge lower with the South American soybean harvest.
"Profits are projected at about $10 per head for the second and third quarters before returning to break-even in the fall of 2013 and winter of 2014."
Even with profitability on the horizon, Hurt said producers need to be cautious about expanding their herds. Extreme drought in the western Corn ?Belt and Great Plains continue to threaten feed supplies and profitability because poor 2013 crops in those states could cause corn and soybean prices to hit record highs.
If the drought were to subside and crop production return to normal, he said, feed prices would drop and pork profitability would climb.
"Most pork producers realize that the level of feed prices is both the biggest threat to those anticipated profits and the greatest opportunity for extraordinary profitability over the next two years," Hurt said.
Hurt's full comments can be found in his article, "Pork Profits on the Horizon" at http://www.farmdoc.illinois.edu/marketing/weekly/html/010713.html