000807 Midwest Hog Packers Set Downtime to Stem Losses

Chicago, IL - IBP Inc. and Hormel Foods Corp. plan to take downtime at four Midwest hog slaughtering plants during the next two weeks, company officials said.

In addition, sources at Conagra Inc. unit Swift and Co.'s hog plant in Worthington, Minnesota, said that facility would be closed one day for a union floating holiday.

U.S. livestock and meat traders said the cutbacks in slaughter were the latest attempts by packers to stem unfavourable operating margins due to weak pork prices.

IBP's plant in Logansport, Indiana, will be closed the next two Fridays, August 4 and 11, for planned maintenance, company spokesman Gary Mickelson said.

“The plant will be closed due to a maintenance project,” said Mickelson, adding that operations would resume both weeks on the following Monday.

Hormel's three pork plants in Austin, Minnesota; Fremont, Nebraska; and Rochelle, Illinois, will be closed Monday for a floating union holiday, said Hormel spokeswoman Meri Harris.

Dave Maher, a livestock market analyst in Ely, Iowa, said attempts by packers to bolster pork prices in recent weeks by trimming slaughter rates had failed to improve margins.

“Packers can take the time off whenever they want to, but with margins as bad as they are, why not take now?” he said.

Maher estimated packers were losing about $12 per head, down $1 from last Tuesday, because of weak retail pork demand.

“What they're trying to do is get the product market to work,” he said. “For some reason they can't get the retailer interested.”

Daily slaughter capacity at IBP's Logansport plant is estimated at 13,000 head, according to statistics from the National Pork Producers Council.

The Hormel plants have combined daily slaughter capacity of about 34,700 head, while daily slaughter capacity at Swift's Worthington plant is estimated at 15,700 head.

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