Smithfield Begins Sow Reduction

Sow herd will be cut by about 5%.

Smithfield Foods Inc. announced Tuesday afternoon plans to begin reducing its U.S. sow herd by 4-5%, or 40,000 to 50,000 sows, which ultimately will result in production of 800,000 to one million fewer market hogs annually. The company currently raises 18 million market hogs per year.

The company said it will begin phasing in these reductions immediately, citing record-high grain costs, with a potential to escalate, given current U.S. government policy "favoring corn for ethanol. The announcement comes at a time when hog production, after the longest period of profitability in history, is losing considerable money due to record-large hog and pork production and breakevens that have risen from the low-$40s, lean live hog basis, last year to about $50 today.

Source: Feedstuffs

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