WASHINGTON, D.C. — Midwest pork producers are being pummeled because of the drought, as feed costs have soared while sale prices for hogs have reached two-year lows.

An economist with Purdue University extension warns the industry overall faces a “tsunami of red ink” and predicts losses this year will exceed those recorded during a terrible 1998 season. From late July through early September, the numbers of hogs moved to slaughterhouses are up nearly 7 percent, according to the most recent USDA report. The expected number was about 1 percent.

“This has caused a $10 per-hundredweight drop in live prices since late July, with prices now in the low $60s,” said economist Chris Hurt. “The source of those extra hogs is probably related to some delayed marketings due to the summer heat, to a desire to sell pigs more quickly before prices really tumble moving into fall and to high-sow slaughter.

“Projected prices for the final quarter this year are in the mid-$50s, using current lean hog futures as a base. Tragically, costs of production are expected to be above $75 per live hundredweight for the remainder of the summer, this fall and winter.”

Overall, corn prices since June have risen 44 percent. Hog prices, though, have dropped by about 27 percent during the same period. The USDA reported last week that pork production overall this year, by pounds, is up 2.3 percent, compared to the same period last year.

After a strong start to the year, pork producers have recognized it likely will be a bruising end to 2012. Bob Keller is among hog farmers moving much of their herd to market early. His family hog farm is located in Willow Hill, Ill.

He said he’s losing up to $10 on every hog he’s selling these days, and fears the figure could approach $40 a head as fall ends. “We are in the mode of getting the hogs to market as soon as possible,” Keller told the Associated Press.

Hurt predicts losses per head this summer at about $30, followed this fall by record quarterly losses of $60 per head. Losses in the first and second quarters of 2013 are projected to be $38 and $5 per head, respectively. He said over the one-year span, the average loss per head could be about $33, which would add up to a $4 billion loss for the U.S. pork industry.

“There is strong evidence that the initial wave of breeding-herd reduction began in early August and has intensified. Sow-slaughter data show that around 30,000 sows were liquidated in the month of August alone,” Hurt said. “This would represent a reduction of about 0.6 percent of the national sow herd in one month.

“This rate will continue, and perhaps even increase, if corn prices stay at current levels or move higher. The breeding herd may decline by 4 to 6 percent in the six months from August 2012 through January 2013. The rate of liquidation is expected to slow sharply after this coming winter,” he added.