By Joanna Newman
STRUGGLING pig producers have seen their New Year wishes come true with a strong bounce in prices since the start of January.
The market reacted favourably to the long-awaited quarterly USDA Hogs and Pigs report, released on 29 December.
Having seen prices drop to Depression-era levels, market players eagerly seized on any good news in the report.
Producers intend to have only 2.88 million sows farrow during the period March to May 1999, a drop of 7% from the same time last year, according to the Government.
The report also shows breeding herd fell 4% from a year ago to 6.67 million head on 1 December, 1998. Fewer farrowings and a drop in the breeding herd suggest that supply should shrink in coming months and alleviate the devastating pig crisis.
However, analysts warn that slaughter rates will have to remain at over 2 million pigs per week throughout the first half of 1999 if there is to be hope for the struggling market by the end of the year. Last week holiday stoppages caused liquidation to drop to only 1.71 million head.
Futures prices are now back at their highest level since early December, with the Chicago February lean hogs contract settling yesterday (6 January) at 34.72¢/lb (46p/kg), up a couple of cents from Tuesday.
In the cash market, prices for live animals have also climbed dramatically and packers are paying 19.50¢/lb (25.9p/kg), well above the historic lows of 8-9¢/lb touched in the panic of last month. Just before Christmas, cash values at the terminals were hovering at 13¢/lb.