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.
Three years after the worst dry spell on record for Texas, fourth-generation rancher Stayton Weldon still doesn’t have enough water for his 300 cattle near Cuero, about 89 miles (143 kilometers) southeast of San Antonio. Dry grass on his 2,600 acres (1,052 hectares) has no nutrition. He has lost 22 cows and two bulls in the past year.
Hog futures rose, heading for the biggest quarterly rally in 15 years, as a piglet-killing virus threatened U.S. meat production, signaling consumers will be forced to pay more for everything from bacon to pork chops.
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.