US produces too many pigs

By Joanna Newman

THE US is continuing to produce too many pigs despite disastrously low prices, says the latest quarterly Hogs and Pigs report.

Pig values have represented a loss for owners throughout 1999, yet the national inventory of pigs as at 1 March, 1999 was 59.9 million head, a shrinkage of only 1% from 1998.

Admittedly the rate of downsizing is accelerating – the March total represents a 4% reduction from 1 December.

But market players agree that a more substantial reduction is needed to restore equilibrium to the market.

Analysts argue that consolidation in the industry is one reason for the failure to cut back on production.

Almost a quarter of US pigs are produced by just seven major operators, who are better placed to carry losses than small pig farmers.

Pig prices reacted negatively to the Hogs and Pigs report. The Chicago April lean hog futures contract settled on Tuesday, 30 March, at 41.1¢/lb (56p/kg) down from 44.0¢/lb (60p/kg) a week ago.

Looking ahead, there will be a delayed shrinkage in the pig herd during 1999, in reaction to low prices.

Pig producers intend to have only 5.7 million sows farrowing in the March to August period, down 7% from actual farrowings in 1998.

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