Chicago sees mixed pig trading

By Joanna Newman

IT has been a mixed week for pig producers in the USA.

On the futures market, lean hog values have continued to climb amid enthusiasm for the long-awaited US Department of Agriculture pork purchases under the Russian food aid programme.

Extremely hot weather in July and early August has hindered producers attempting to bring their pigs to market and slowed the rate of weight gains, which has also helped support prices.

The Chicago lean hog August contract has risen to 53.8¢/lb, up from about 51¢ a week ago.

However some areas have seen cooler conditions over the last few days, which could improve supply and cause prices to ease off.

Meanwhile, pork belly futures have dropped sharply in a trading reaction, after almost doubling in late July.

The August contract closed on Tuesday (10 August) at 53.6¢/lb (74p/kg), having touched 62¢ last week, but still up from a low of 33¢ (45p) in mid-July.

Against a backdrop of low but volatile prices, pig producers find themselves in their second consecutive year of heavy losses and as many as a third of independent operators could face bankruptcy.

Industry spokesmen denounce the recently approved $7.4 billion (£4.6bn) federal farm aid package as inadequate, as it only includes $325 million (£202m) for all livestock and dairy producers, compared with the billions lost by pig producers alone.