By Joanna Newman
THE US pig glut is even worse than analysts have feared.
Pork stocks in cold storage are at their highest level for the month of March since 1952 at a massive 558.3 million lbs, according to the latest cold storage report from the USDA.
Pork bellies alone have almost doubled from a year ago to 106.1 million lbs in March, even higher than the industrys gloomy estimates.
In reaction to the report, the Chicago May pork bellies futures contract plummeted to 53.6¢/lb (73p/kg), from over 55¢ prior to the report.
Oversupply has helped drive the market down 16% from around 63¢ in February.
US producers are pinning their hopes on the proposed food aid shipments of free pork to Russia to help alleviate the glut.
Cash prices have slipped about 1¢/lb to 29.5¢/lb (40p/kg) in sympathy with the bellies market, as slaughter houses take advantage of oversupply to drop their bids for live pigs.
Acrimony is rife in this struggling industry. Smaller pig farmers, who suffered heavy losses in 1998, criticise the trend of consolidation into the hands of large-scale operators.
Family farms complain that these major producers are better able to bear losses and therefore slow to respond to market downturns by cutting output.
The Campaign for Family Farms is collecting signatures for a referendum to abolish the pork checkoff, a controversial industry-wide scheme whereby all producers help pay for national pork promotion.