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July 29, 2008
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US pork production to fall amid big supply
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US pork production will be slashed late this week and early next week as several plants will be shut down due to a combination of excess pork and floating holidays, cash dealers and pork companies said Tuesday (July 28).
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The largest drop will be on Monday (August 3), when six plants are expected to close down, reducing production that day by about 23 percent, industry sources said.
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The reduction comes at a time when the US is producing more pork than it can use.
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Glenn Grimes, agricultural economist at the University of Missouri says slowdown in pork exports due to global recession and AH1N1fears has resulted to supply glut in domestic channels.
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At least two pork plants will be down on Friday and up to six will be down on Monday, according to livestock dealers who monitor pork production. Two of Monday's closings will be due to floating holidays.
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On Friday, Smithfield Foods Inc plants in Sioux Falls, South Dakota, and Sioux City, Iowa, are scheduled to be down, dealers said.
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Monday's scheduled closings currently include the Smithfield plants in Clinton and Tar Heel, North Carolina, and in Smithfield, Virginia; the Hormel Foods Corp plants in Austin, Minnesota, and Fremont, Nebraska, and the JBS-Swift plant in Worthington, Minnesota.
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Hormel confirmed that its two plants would be closed Monday for a floating holiday.
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Smithfield said it does not comment on plant operations, and JBS-Swift had not returned a call regarding its plant.
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Smithfield's Tar Heel plant is the world's largest pork plant and can process about 32,000 hogs a day, industry sources said.
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Domestic pork sales have been fairly strong, however meat for exports are swelling local supplies and preventing meat companies from raising prices to profitable levels, said Grimes.
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Pork exports have fallen this year in part because China is buying less. China bought huge amounts of US pork last year, when it hosted the Olympics, but now does not need as much. Also, its own pork production is increasing.
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The global recession also has hurt pork exports as overseas consumers are buying less meat, said Grimes.
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In addition, the outbreak of AH1N1 or swine flu in spring had several countries banning pork from some US states. The bans were applied despite scientists assuring consumers that hogs and pork are safe and do not spread the flu.
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According to the latest figures from the US Department of Agriculture, US pork exports in May were down 11 percent from April and down 36 percent from a year earlier.
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China bought 2.24 million pounds that month, down 85 percent from April and down 95 percent from last year.
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Pork sales to Mexico, another top buyer, were down 15 percent in May from April and down 3 percent from a year earlier.
