Asmall group of U. S. hog producers has devised an industry-financed plan to reduce the domestic hog herd as a means of restoring profits to an industry that has been losing money since late 2007.
Called the Producer Retirement Program, the goal is to collect $50 million to $60 million, which would then be used to take an estimated 250,000 to 400,000 sows out of production, Chuck Wirtz, chairman of the program, told Reuters.
The voluntary program is designed as a one-time herd reduction effort, with sow liquidation expected in August and September.
Because of the biology of hog production, it would be spring of 2010 before the buyout would affect hog prices. The buyout program, if successful, would mean fewer pigs born this fall and fewer market hogs next spring.
Money for the sow purchases would come from an enrolment fee of $20 per sow in each participating producer’s herd.
“It is the first time it has been tried in this industry,” said Wirtz.
The plan is similar to one in the dairy industry, in which industry group Cooperatives Working Together pays milk producers to remove cows from production.
Hog producers wanting to liquidate their sow herd via the program can enrol tentatively from mid-June to mid-July. Those selected will be paid to liquidate their sows and will have until late September to send them to slaughter, said Wirtz.