US pig prices drifting

By Joanna Newman

IT has been another disappointing week for US pig farmers, with prices continuing to drift at low levels.

The Chicago April lean hogs futures contract settled on Wednesday (10 March), at 43.3¢/lb (59.2p/kg), almost unchanged from a week ago.

Cold weather in key supply regions has hampered spot deliveries and helped firm up prices paid by packers.

Cash prices for live animals have inched up by 0.50¢/lb to 25.5-26.5¢/lb (34.8-36.2p/kg).

Producers are hoping that the recent cattle rally will enhance porks competitiveness and boost demand.

However, the relative wholesale cost of beef versus pork appears to have little direct impact on consumer purchasing, as retailers have not historically passed along their full cost savings to supermarket shoppers.

Slaughter rates are steady at 1.96 million head a week, representing almost full capacity for US pig packing houses.

During 1998, the USA slaughtered a record 101.0 million pigs or about 1.94 million head a week, up 10% from 1997 according to a new USDA report.

With average live weights unchanged at 256 lbs/head, total pork production also rose 10% to a record 19.0 billion pounds.

However, despite this high processing activity the US still suffers from a glut of pigs and a bottleneck at the slaughter houses due to lost capacity.

The National Pork Producers Council (NPCC) is seeking mandatory price reporting by packers, while pig farmers are pushing the US Department of Agriculture to modernise and improve its pig crop estimates.

Measures such as these should improve market efficiency and help smooth out the extreme cyclical swings of the US pig industry.

The government has announced expedited tax refunds for the nations beleaguered pig producers, who suffered heavy losses in 1998.

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