September 9, 2011

Smithfield: US pork supplies to be tight

US pork supplies is expected to be limited in the spring of 2012, according to Smithfield Foods Inc. (SFD) Thursday (Sep 8).

Enduringly high feed costs, most notably for corn, have caused hog producers to slaughter higher numbers of sows, or adult females recently, said Smithfield Chief Executive C. Larry Pope. The trend points to smaller US hog herds that will have to produce more pork as early as next year.

"The sow slaughter has turned dramatically," he said.

Chief Financial Officer Robert Manly said hog producers in the US were recently slaughtering sows at a rate of 5% above last year. Until a few months ago, he said, they were slaughtering sows at a slower rate than last year.

Pork supplies could in turn contract next spring as the effects of lower production herds reach the market. "It will be six more months before that shows up in any meaningful way," said Pope.

"Whatever happens to corn, it is going to impact the rest of the industry more than it impacts us," said Pope.