Smithfield adjusts U.S. cash hog pricing during shutdown

Reuters

CHICAGO, Oct 1 (Reuters) - Smithfield Foods Inc, the largestU.S. meat packer, notified hog producers on Tuesday that it willadjust its pricing method for hogs until the federal governmentreopens.

Smithfield prices live hogs based on U.S. Department ofAgriculture market reports, which have been suspended.

"We need to address how we will handle any valuation that iscalculated using a quote from a USDA publication," Smithfieldsaid in a letter to hog producers.

The USDA, which issues thousands of market reports that theagriculture industry uses to price everything from hogs andcattle to soybeans and corn, pulled the plug on those reportsduring the federal government shutdown.

Smithfield said it will determine the price it pays for cashhogs based on USDA market hog prices on Sept. 30 for each dayuntil the government reopens through Oct. 4.

If the shutdown extends beyond Oct. 4, Smithfield said itwould "evaluate the market conditions to establish a fair marketvalue."

"All packers will continue to record all trades to becompliant with Mandatory Price Reporting, and will be sendingthose trades to the USDA," Smithfield added. But the governmenthas said it "will not retroactively report the daily spot marketfor days their office is closed."

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