Friday, June 20, 2008

Hog Farmers Face a Perfect Storm

Back in April we had a couple posts on where this is going, "The Hog Cycle" and "Look for MUCH Higher Meat Prices (after they drop)".
From the Wall Street Journal:

..."There is very deep concern," said Richard Lobb, spokesman for the National Chicken Council. "This is putting significant pressure on all the companies."

The floodwaters, grain prices, worried Wall Street debt raters and sticker-shocked consumers have combined in recent days to slice millions of dollars in value from shares of protein giants such as Smithfield Foods Inc., Tyson Foods Inc. and Pilgrim's Pride Corp. Tyson shares perked up Thursday after BMO Capital, noting the recent slide, called the company "our favorite ag/protein idea."...

...In the short term, farmers are likely to sell some of their livestock to avoid paying the high costs of feed. That could lower meat prices for a while, but eventually they are expected to move higher....MORE including the picture of porkers on the roof.