Pork producers say U.S. consumers will pay more for the meat if the industry abandons the practice of confining sows to single stalls to appease food companies including McDonald’s Corp. demanding open pens.
U.S. hog producers may start to cull herds as the faltering economic recovery curbs pork demand and tightening corn inventories boost livestock-feed prices, curbing animal supplies and increasing costs for meatpackers.
Meat prices are poised to extend a 14 percent rally this year that drove U.S. retail costs to the highest levels since the 1980s as surging corn futures prevent livestock producers from expanding their herds.
The U.S. cattle herd has shrunk to the smallest since three years before Ray Kroc opened his first McDonald’s Corp. hamburger stand, reducing supply and raising prices even as domestic demand sinks to a two-decade low.
U.S. hog farmers are making money for the first time in a year after prices surged to a two-decade seasonal high and feed costs fell, spurring them to expand herds that will yield the most pork on record.
The U.S. hog-breeding herd on June 1 shrank 3 percent from 12 months earlier, a sign that some producers are repaying debt rather than expanding after a return to profit in March ended more than two years of losses.