By Joanna Newman
SMALL-SCALE pig farmers fear a repeat of the 1998 fiasco, as prices continue to free-fall.
The Chicago July lean hog contract has collapsed to 51.3¢/lb (70p/kg) on Tuesday (15 June) down from over 55¢ a week ago.
This is dangerously close to the Depression-era lows touched last December, with the market down almost a fifth in just a couple of months.
It was a severe lack of slaughter capacity that caused last years bottleneck and forced producers to sell at ever lower prices in December.
The industry, led by the National Pork Producers Council, is now considering building producer-owned co-operative packing plants to enable smaller producers to process their pigs in the future.
At the supermarket end of the chain, US consumers seem to be switching their allegiance to beef this summer.
The resulting lack of retail demand for pork products is further adding to the industrys woes.
The cash belly price has dropped to 50-53¢/lb, down from 58¢ a week ago.
However, most analysts predict that retailers will start to promote pork to consumers if the disparity between wholesale beef and pork continues to widen.
Mild weather usually facilitates bringing pigs to market and the cooler forecasts have caused packers to drop their bids for live pigs as they expect ample supply over the next few days.
The cash price at the terminals has fallen to 33.0-34.0¢/lb (46p/kg), down from 34.5-35.5 a week ago.