Meat Industry INSIGHTS Newsletter

980558 U.S. Post-Holiday Hog Slaughter Plans Trimmed

May 28, 1998

Chicago - Several U.S. pork plants were cutting production schedules this week because of steep declines in pork prices, company officials and market sources said.

Most reductions were for Saturday, which had been expected to see hefty slaughter to replace lost production during Monday's Memorial Day holiday when most plants were closed.

Estimates for Saturday slaughter gathered early this week ranged up to 125,000 head for Saturday. Those estimates slipped to 70,000-80,000 head by Thursday when pork prices fell sharply on Wednesday.

IBP Inc. spokesman Gary Mickelson said the company was reducing hours for most of its pork production shifts on Thursday and Saturday but would run regular eight hour shifts on Friday. Mickelson did not say how many hours the shifts would be reduced but said market factors had spurred the reductions.

“Product sales have not been as strong as hoped and as a result, finished product prices have rapidly declined,” Mickelson said. “For the week, our pork plants will run 36-40 hours.”

IBP operates five pork plants in Iowa and one each in Nebraska and Indiana.

Smithfield Foods, Inc. five pork plants, which include subsidiary John Morrell and Co., plants in Sioux City, Iowa and Sioux Falls, SD, will not run on Saturday, said Jeff Luckman, vice president of hog procurement.

“We're not pushing it at all. Sometimes plants like to do it, work Saturday as a fifth day, to cover overhead but we're not because of product pressures,” Luckman said.

Company sources at Cargill Inc.'s Excel Corp., Farmland Industries' Farmland Foods and ConAgra's Swift and Co., were not available for comment on operations.

Trade sources said Swift's Worthington, Minn., plant canceled slaughter for Saturday.

Pork prices were down due to reduced retail demand following the Memorial Day holiday, with some retailers shifting to beef, said Chuck Levitt, livestock analyst with Alaron Trading Corp.

“Basically the bloom is off the rose as far as the promotional activity is concerned. We're getting a little shuffling away from some of the pork items to beef for end-of-the-month/first-of-the-month payday and weekend promotions,” Levitt said.

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Iotron Technology Inc.

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