By Joanna Newman
LEAN pig futures prices have plummeted to their lowest level since the start of the month as the hype surrounding planned pork aid to Russia gives way to renewed pessimism.
The US pig industry is suffering from heavy oversupply at a time when demand is disappointing.
Packers need to maintain a high slaughter rate if producers are to process their backlog, but this results in excess pork production in the short term.
A record 517.8 million pounds of pork were held in cold storage in January, up 16.1% from a year ago and up from the previous record of 503.5 million pounds set in December.
During January packers slaughtered 8.55 million head, virtually unchanged from a year ago.
The prospect of pork shipments to Russia is no longer enough to support the market and the Chicago April lean hogs futures contract dropped to 43.42¢/lb (60p/kg) on Wednesday(24 February), down from 45.52¢ just over a week ago.
Faced with persistent weakness in pig prices and a structural imbalance in the industry, US producer organisations are becoming increasingly vociferous in their demands for help while agricultural economists also struggle for solutions.
The National Pork Producers Council has asked Congress for a subsidy of $25 (£15.62) per hog, up to $50,000 (£31250) per producer.
Recent ideas from economists to restructure the pig industry include alternative marketing methods and encouraging the sale of organic pork.