Finally, pork producers have some positive news that has increased optimism for greater profitability in the coming year, said a Purdue University agricultural economist.

"That good news came from USDA in two forms. The first was the September Hogs and Pigs report which indicated little change in the size of the breeding herd. The second was the feed-price lowering impacts of higher-than-expected corn inventories revealed in the September Grain Stocks report," said Chris Hurt.

The combination of stronger hog prices and lower feed prices has put the pork outlook back into solid black for the coming year, he said.

Pork producers have largely settled for the status quo because of the uncertainty over feed prices. As a result, USDA says the breeding herd has expanded only slightly as producers awaited the corn and soybean yield and price outcomes of the troubled 2011 growing season.

"USDA indicated that the breeding herd has increased just 0.6 percent over the past year. The expansion is occurring in the traditional hog production states of the Midwest. The breeding herd was up 4 percent in Missouri and 3 percent each in Ohio, Indiana, and Nebraska. Iowa's herd was up 1 percent," Hurt said.

While the breeding herd only increased fractionally, pork production will be up by a larger percentage due to the surging sow productivity. This summer, the number of pigs per litter set a new quarterly record at a bit over 10 pigs. This establishes the possibility that the yearly average will be at 10 pigs or higher for the first time.

"In contrast, the weaning rate was at just nine pigs per litter in 2005. This represents an annual productivity growth of about 2 percent," he added.

Pork production for the coming year will be up 2 to 3 percent. This will be led by the higher sow productivity and by somewhat higher market weights with lower feed prices, Hurt noted.