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UPDATE 1-U.S. pork production to drop amid big supply
July 28, 2009 / 6:15 PM / 8 years ago

UPDATE 1-U.S. pork production to drop amid big supply

(Recasts, adds economist comment, details)

By Bob Burgdorfer

CHICAGO, July 28 (Reuters) - U.S. pork production will be reduced late this week and early next week as several plants will be closed due to a combination of excess pork and floating holidays, cash dealers and pork companies said Tuesday.

The largest drop will be on Monday, when six plants are expected to down, reducing production that day by about 23 percent, industry sources said.

The reduction comes at a time when the United States is producing more pork than it can use.

A slowdown in pork exports due to the global recession and swine flu fears has put an excess of the meat in domestic channels, said Glenn Grimes, agricultural economist at the University of Missouri.

At least two pork plants will be down on Friday and up to six will be down on Monday, according to livestock dealers who monitor pork production. Two of Monday’s closings will be due to floating holidays.

On Friday, Smithfield Foods Inc SFD.N plants in Sioux Falls, South Dakota, and Sioux City, Iowa, are scheduled to be down, dealers said.

Monday’s scheduled closings currently include the Smithfield plants in Clinton and Tar Heel, North Carolina, and in Smithfield, Virginia; the Hormel Foods Corp (HRL.N) plants in Austin, Minnesota, and Fremont, Nebraska, and the JBS-Swift plant in Worthington, Minnesota.

Hormel confirmed that its two plants would be closed Monday for a floating holiday.

Smithfield said it does not comment on plant operations, and JBS-Swift had not returned a call regarding its plant.

Smithfield’s Tar Heel plant is the world’s largest pork plant and can process about 32,000 hogs a day, industry sources said.

“We are having difficulty selling as much pork as we are producing,” Grimes said. “We have too much pork to get the (pork) prices we need.”

Domestic pork sales have been fairly strong, but the meat that normally would be exported is swelling supplies here and preventing meat companies from raising prices to profitable levels, said Grimes.

Pork exports have fallen this year in part because China is buying less. China bought huge amounts of U.S. pork last year, when it hosted the Olympics, but now does not need as much. Also, its own pork production is increasing.

The global recession also has hurt pork exports as overseas consumers are buying less meat, said Grimes.

In addition, the outbreak of swine flu here this spring had several countries banning pork from some U.S. states. The bans were applied despite scientists assuring consumers that hogs and pork are safe and do not spread the flu.

In May, which is the latest for which export figures are available from the U.S. Agriculture Department, U.S. pork exports were down 11 percent from April and down 36 percent from a year earlier.

China bought 2.24 million lbs that month, down 85 percent from April and down 95 percent from last year.

Pork sales to Mexico, another top buyer, were down 15 percent in May from April and down 3 percent from a year earlier. (Editing by Walter Bagley)

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