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Mark Schultz

Mark Schultz

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(2 of 2)"We just hear rumors in the plant," he said.

"It's quiet among management.

But we've heard that anywhere from a couple more weeks until the end of August, it could be slow."Twin Cities commodities analyst Mark Schultz said he understands that a narrowing of profit margins and temporary shortage of hogs had led three meatpacking plants to halt operations for a day this week, including plants in Sioux City and Columbus Junction, Iowa.Schultz, the vice president of Northstar Commodity Investments in St.

Paul, said he hadn't heard of plants planning to close down, but some are altering what their slaughter numbers are going to be until profit margins improve.Concerns about H1N1 certainly could be affecting the market for processed pork, he said.

So could an unemployment rate nearing 10 percent nationally."I'm guessing maybe that your average consumer isn't going out to eat as much," Schultz said.

"And if he does go out to eat, I don't know how many are changing their eating habits because of concerns about things like H1N1.

And that's true around the globe."Short-term shutdowns in all kinds of industries aren't all that uncommon, said Bill Adamson, an economics professor at South Dakota State University in Brookings.If John Morrell cut back operations for a day, it wouldn't be so different from shutdowns that occur in facilities that produce paper, cars or even gasoline, Adamson said.

Sometimes, plants also close temporarily for maintenance issues."If there was a temporary shutdown, it shouldn't be a problem," Adamson said.

"If it's a temporary shutdown based on probably poor demand, once they clear their inventory, they go back into production."In June, Smithfield reported its first full-year net loss since 1975.

The company blamed higher grain feed costs, including the effect of ethanol on corn prices.The company cut its herds of breeding hogs last year by 10 percent and plans an additional 3 percent cut.Reach Steve Young at 331-2306.



http://www.argusleader.com/article/20090717/NEWS/907170320/1001
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