June 11, 2010

No herd expansion set for US hog producers

US hog farmers, profitable for the first time since 2007, are not planning "aggressive" herd expansion, said Howard Hill, the chief operating officer of Iowa Select Farms, the fourth-largest US hog producer.

Rebounding hog prices will allow producers to maintain profit at least through the end of 2010, Hill said. The company has no plans to expand after cutting its 160,000-head sow herd by 7,500 animals during the downturn in 2008 and 2009, he said.

Earnings may increase as the US economy recovers from the recession and Chinese meat demand improves, Hill said. China agreed to resume imports of US pork as of March 24, ending a ban imposed following the outbreak of swine flu last year.

He added that US consumer demand has not picked up, although exports have been surprisingly strong, noting that the biggest potential market in the future is China. China raises more pigs and eats more pork than any other country, but they have a very traditional production system, he said.

Smithfield Foods Inc. is the top US hog farmer based on 2009 sow statistics, followed by Triumph Foods and Seaboard Foods, according to reports.