CHICAGO, Ill. (Reuters) — U.S. hog farmers who built up their herds to compensate for porcine epidemic diarrhea losses two years ago are now faced with the realization that they’ve produced too much bacon.
The aggressive increase in hog production that followed the PED outbreak in 2013 brought record profits for those whose pigs survived but has now created the greatest U.S. hog price collapse since the late 1990s.
Benchmark lean hog futures prices on the Chicago Mercantile Exchange have dropped 42 percent from their July 2014 record high of $133 per hundredweight.
The hog glut spells more trouble for a U.S. farm economy already struggling with the lowest grain prices in five years.
Tyson Foods chief executive officer Donnie Smith said recently that he expects the domestic ex-pansion to continue into next year, resulting in three to four percent more hogs and pork on the domestic market.
