May 26, 2014
Tyson to buy heavier hogs, lower production
Tyson is buying heavier hogs and expects to scale down production more than usual this summer, as it copes with a drop in pig supplies due to PEDv, Reuters reports.
"We''re seeing very heavy hogs coming to themarket," said the chief executive of Tyson Foods Inc, Donnie Smith.
Porcine epidemic diarrhoea virus (PEDv) has killed about seven million piglets since it was detected last year in the US, where the outbreak has been most severe. The virus causes diarrhoea, vomiting and severe dehydration, and is transmitted orally and through pig faeces. The mortality rate is 80 to 100%.
The drop in supply drove Chicago hog futures to an all-time high on April 2 of nearly US$2.84/kg, although prices have since fallen. TheUS is the world''s largest pork exporter.
To offset some of the reduced number of pigs, farmers are fattening pigs to record heavy weights. Tysonis accepting slaughter hogs that weigh about 134 kg, 10 to 15% heavier than usual, said Steve Stouffer, president of fresh meats at Tyson.
The larger pigs have not caused problems in plantswhich are used to handling smaller hogs, and farmers are likely to produce them at that size until it is no longer economical to do so, Stouffer said.
In addition, Smith said Tyson will reduce hog slaughter and pork production levels more than usual during the July - September period, when pig supplies are expected to be the lowest. Summer tends to be a slower production period.
The company has no specific plan for how it will lower production and is managing supplies from week to week, Stouffer said. If summer is cooler and wetter than usual, fewer hogs are likely to die from heat, which could offset some of the lower supplies, he said.
Tyson is alsoworking closely with customers to offset the decrease in supply, Smith said.