Smithfield pork plant closure could boost hog prices

The imminent closure of Smithfield's John Morrell pork processing plant in Iowa could lead to higher prices for pigs.

The plant, which is scheduled to close this April, will affect 1,500 employees and the suppliers, said Iowa State University Extension livestock economist John Lawrence.

While the negative impact for pork producers may be limited, they may have to find another buyer and that could lead to higher transportation costs, he said.

Since the hog industry is reducing production, the Morrell plant closing will better match slaughter capacity to US production levels. As a result, the smaller supplies will lead to higher hog prices, and competition may be increased as packers need to bid more aggressively to assure business due to a smaller national market hog supply.