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Tyson's actions won't shake the market

by 5m Editor
30 July 2007, at 11:11am

US - Food giant Tyson Foods has cut-back its pork production to counter unfavorable market conditions.

The Arkansas-based processor says poor market conditions, declining pork sales and high hog prices are forcing the actions which will affect six of its plants in Iowa, Indiana, and Nebraska.

It's taken in excess of 24 hours of production out of the schedule of six of its pork plants - the equivalent of three shifts, says the company.

However, livestock analysts say Tyson's cutbacks will not affect on the overall hog market. It may signal tighter supplies for the packers, but the number for pigs available for slaughter are still high and the US is not seeing any sign of a shortage.

Market prices dipped to $69.12 per hundredweight on 17 July, but the lean hog index rose on Wednesday to $71.78. Prices are climbing, which is good news for producers

Prices reached an annual high of $78.49 in late June, but analysts are unsure of where the market is heading. Some packers have been known to cut production to stave off market highs, but most feel Tyson's actions will have little impact. Increasing corn prices and global competition are beginning to drive the pork market and food prices are forecast to increase.

5m Editor