July 17, 2009

Tyson Foods Inc. of Springdale will sell five company-owned farms in Benton and Washington counties and in McDonald County, Missouri, spokesman Gary Mickelson said Wednesday (July 15).

The company cited high grain costs and reduced demand for pork. The move will reduce Tyson's sow herd by 20,000, or 28.6 percent, to about 50,000.

The farms it plans to close produce finished hogs, feeder pigs and weaned pigs that are sold to finishers and processors. The farms account for less than 1 percent of the hogs Tyson processes, the company said. The company's pork-processing plants are in Iowa, Nebraska and Indiana.

John Lawrence, an agricultural economics professor and livestock marketing specialist at Iowa State University, said most producers started losing money on hogs in October 2007, had only a couple of good months in 2008 and are projected to lose money through the end of this year.

Lawrence said that underlying the losses are record production levels of pork and poultry, high grain prices in 2008 and the global recession.

He said the strength of the dollar against other currencies also led to sharply reduced exports.

As a result of the reduced demand, hog producers needed to reduce herds by about 10 percent to prop up prices, he said, but only trimmed 2 percent to 3 percent.

Tyson said that over the next 10 weeks it intends to sell or send to slaughter all the hogs at those five farms.

A report by Glenn Grimes and Ron Plain, economists and livestock market specialists at the University of Missouri, said demand for live hogs from January through May was down nearly 5 percent from the same period a year ago.