US pig farmers look for scapegoats

By Joanna Newman

AS pig prices decline once again, recriminations over the fiasco of the US pig industry have grown louder.

Small pig farmers are blaming large operators, while all producers are outraged at the retailers who have allowed their margins to widen dramatically.

One major producer recently announced that it lost the equivalent of US$370 (£230) a sow in 1998.

Producers had hoped the worst was over after the market rebounded from the Depression-era lows (on an inflation-adjusted basis) witnessed last December.

But this recovery has proved short-lived. The Chicago April lean hogs contract settled on Tuesday (3 March), at 43.05¢/lb (58.8p/kg), down from 43.42¢ a week ago and down from around 48¢ in early February.

The industry continues to suffer from a bottleneck at the point of slaughter because of lost packing capacity, aggravated by overproduction due to the cyclical nature of the business.

This week packers have enough supply and are not aggressively buying market-ready pigs.

Cash prices have slipped to 25-26¢/lb (34-35.5p/kg) at the terminals, from 27¢ a week ago.

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