U.S. pork producers are reducing the nation’s swine herds, according to a report on Meatingplace.com. The herd will ultimately drop by about 3.5 percent in 2009 and another 3.1 percent in 2010. The prediction was made in a report by J.P. Morgan analyst Ken Goldman, detailing discussions the analyst had with Mark Greenwood, senior financial services executive, AgStar Financial Services.
According to Goldman, Greenwood expects 112 million to 113 million hogs to be slaughtered this year, and only 109 million in 2010. Meanwhile, hog slaughter weights should drop because of poor quality feed caused by a late corn harvest which increases the chances of mold. And because growers are hanging on to their older, less productive sows.
The herd reduction won't be quick, but it will be "orderly," Goldman quotes Greenwood as saying. Lenders are pushing for reductions in lieu of more bankruptcies among growers; they are unwilling to fund even temporary losses, Greenwood said. Still, it will take some months for the reductions to be apparent in the numbers. Meanwhile, the larger operations already have cut their herd sizes significantly, Goldman reports.