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Smithfield Foods Announces Major Sow Herd Reduction
Feb 20, 2008 5:20 PM
The nation’s largest pork producer, Smithfield Foods, headquartered in Smithfield, VA, announced plans to reduce its sow herd by 4-5%, beginning immediately.
The Feb. 19-announcement will account for a 40,000-50,000-sow reduction and ultimately reduce the company’s output of market hogs by 800,000 to one million head.
“Given the economics for raising hogs today, we cannot continue on the current path; something has to change,” stated C. Larry Pope, Smithfield’s president and chief operating officer.
“Grain costs continue at record levels, with the potential of escalating, given the current U.S. government policy favoring corn for ethanol. Today, the economics are very challenging and we believe that these increased costs will translate eventually into still higher food costs for the American consumer,” he added.
There was a lot to be positive about in the pork industry the last week of October. I realize it is difficult to be optimistic when you are still losing $25 to $30/head. I also realize that positive news at this point could be as dangerous as it is welcome. But facts are facts, and we must recognize them.
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As I begin this week's column, I"m reminded of two different "flip side" statements that may help characterize the topic at hand. The first is the old Archie Campbell schtick - "That's good - no that’s bad," which I have used before. The second reflects President Truman's frustration with economists' incessant use of the qualifier - "on the other hand" - to introduce the contrary opinion on a given topic. President Truman once demanded in his usual colorful language: "Will someone please find me a *!&%$*?>
