By Joanna Newman
NORTH American pig producers, already nervous in the wake of Decembers market collapse to Depression-era levels, are alarmed by renewed weakness in pig prices this week.
Suppliers are worried by the failure of pig prices to respond to this weeks rumours of aid shipments of beef and pork to Russia, at a time when cattle prices are soaring. Clearly, hopes of additional pork exports have not proved sufficient to bolster the US pig market.
The Chicago lean hog February futures contract drifted down to 40.65¢/lb (54p/kg) on Wednesday (3 February) from 42.8¢ just over a week ago. The cash pig market at the terminals is at 27-28¢/lb (around 37p/kg), down from 29-30¢ a week ago.
Wholesale pork has declined recently, with bellies at 50-51¢/lb, down from 53-54¢/lb 10 days ago. Even at these levels, the packers are reported to be enjoying excellent margins at the expense of pig farmers, thanks to the corresponding drop in live pig values.
As independent pig producers in the USA struggle to survive, relations with their neighbours are far from easy. Mexico moved closer this week to imposing anti-dumping duties of up to 30% on American pigs crossing south of the border.
Other news to emerge this week was more favourable for US farmers. Canadian workers have finally resolved an eight-week strike at two Ontario pork plants.
The shutdown has been blamed for the rush of Canadian pigs entering the USA just before Christmas which helped trigger the US market collapse.