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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.
At what point do we punt the December Hogs and Pigs Report? That is the question that is weighing on the minds of both market analysts and producers as hog slaughter numbers remain far below expected levels and weights show no signs of "backed up" hogs. I realize there are performance issues, so let's discuss the report, what it suggested for this spring, and the forces that could be driving numbers in various directions.
Friday's Cold Storage report was not wildly bullish, but was certainly good news regarding the status of frozen meat and poultry inventories. Stocks for every species were well below year-ago levels and lower than the already-low levels reported in the December report. Data for all meat and poultry species appears in Table 1 and the monthly species totals are shown in Figure 1 to provide a historical perspective.
