Stock of Smithfield Foods plummeted Friday after the Hogs and Pigs report which revealed a still-expanding U.S. hog inventory. Analysts predict the high inventory will cause additional pressure on prices that producers will receive for market animals.

The stock, traded on the New York Stock Exchange under the symbol SFD, closed Friday’s trading at $19.85, down nearly 20 percent from the previous days closing price. Just one month ago, the stock had been trading above $30 per share.

Smithfield, the world's largest hog processor and producer, had previously reported that 2007 fourth-quarter income fell 94 percent, or nearly $35 million, driven down by a $129 million loss in hog production.

USDA livestock analyst Shayle Shagam says that as of June 1 the hog sector was still in an expansionary mode, reports Farm Futures. Adding to the problem, corn prices hit record levels midweek, topping $7 a bushel -- up 20 percent in the past month and more than 80 percent over the past year.

"The problem for Smithfield and virtually all companies involved in the raising of beef, chicken and pork," said Steve Marascia , an analyst with Anderson & Strudwick in Richmond, "is that rising corn prices will directly impact earnings to the downside."

Source: ThePigSite.com