Sow Herd Reductions Could Improve Profitability

CANADA - Manitoba Pork Council suggests reduced US hog production, restored consumer confidence in pork and a rebound in the economy will be key to restoring profitability in the North American pork industry, writes Bruce Cochrane.
calendar icon 9 June 2009
clock icon 3 minute read

Following almost 40 months of profitability, US pork producers have been losing money for the last 12 to 14 months.

Last week a Manitoba Pork Council delegation traveled to World Pork Expo in Des Moines to meet with American producers and get a sense of what is happening in the US to deal with the low prices.

Pork Council general manager Andrew Dickson says a voluntary effort being proposed to trim the US sow herd is getting a mixed reaction.

Andrew Dickson-Manitoba Pork Council

There's a program being proposed as a private venture where producers would sign on, put some money into a pot and then they would bid on getting some of this money to reduce their own herd, the target being 300 thousand as a reduction.

The thought was that Canada would reduce its herd similarly by 200 thousand sows which, to us, didn't make much sense because the United States has a sow base of six million and ours is just over a million so, to us, the percentages didn't seem fair.

The other thing it didn't take into account the fact that in Canada in the past three years we've seen a reduction in our sow herd by 13 per cent.

We've lost over 200 thousand sows out of our systems and we've cut production by three million almost per year and yet the United States has seen little or no reduction in numbers.

In fact, if anything, they're actually producing more pork than they did three years ago.

In terms of reacting to market signals, we're not sure why they have been continuing to produce the levels they've had.

The only thing we can think of is there's so much money had been saved and so much debt paid off in the previous 40 months that they can keep on going.

Mr Dickson believes the key to recovery will be for purchases by importing countries to return to levels prior to the H1N1 virus, a restoration of public confidence in the economy and reductions in US pork output.

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