By Joanna Newman
THERE was more bad news for Americas embattled pig producers this week as prices dropped again at the start of this week before stabilising ahead of the Thanksgiving holiday.
The Chicago December lean pig futures contract lost ground to 28.00¢/lb on Monday, just half its level in early July. By Wednesday, the contract had inched back up to 29.07¢/lb. This compares with 31.0¢/lb a week ago.
Cash prices were largely responsible for dragging the futures market lower. The Iowa cash market continued to drop rapidly to 14¢/lb, down from 17¢ a week ago and off a third from 21¢ just two weeks ago.
Although slaughterhouses are working flat out, clearly this is not enough to handle pig supply. The decrease in the amount of national packing facilities over the past year means that this is still a buyers market.
Consumer pork demand is high, but the dwindling number of packers simply cannot handle the amount of pigs being brought to market. During October, pig kill totalled a record 9.35 million head, up 7% from 1997. Pork production climbed 6% to an all-time high of 1.76 billion lbs, a 6% increase from the previous record in 1997.