Smithfield Foods cutting hog herd

SMITHFIELD, Va. — Pork processor Smithfield Foods said Tuesday it is reducing its U.S. breeding herd by 4 percent to 5 percent, or 40,000 to 50,000 sows, because of rising grain costs.

That means Smithfield, which owns Circle Four Farms in Utah, ultimately will produce 800,000 to 1 million fewer market hogs annually, the company said. Smithfield currently raises 18 million market hogs a year.

"Given the economics for raising hogs today, we cannot continue on the current path; something has to change," Smithfield Chief Executive C. Larry Pope said.

Grain costs continue at record levels and have the potential to escalate, "given the current U.S. government policy favoring corn for ethanol," Pope said.

Pope also said he believes "these increased costs will translate eventually into still-higher food costs for the American consumer."

Grain prices have soared in the past year, driven by dwindling stockpiles and world demand for wheat, corn, oats and soybeans to feed people and livestock. In addition, bad weather has battered crop after crop around the globe, most recently in India and Canada, further pressuring prices.

Smithfield is America's leading processor and marketer of fresh pork and packaged meats, as well as the largest producer of hogs.

In February 2003, Smithfield reduced the size of its breeding herd by 35,000 sows — adult female swine that have had a litter or reached an advanced stage of pregnancy — over a six-month period, company spokeswoman Keira Ullrich said in an e-mail.