Bid to profit from countercyclical capacity management Signs appear of stock rebuild Maybe the tight supply phase of the current UK pigmeat production cycle will prove shorter than buyers and most farmers believe. A couple of surprising figures among the results of a MAFF national herd survey might be signs some producers are already preparing to build up breeding stock numbers again after the severe market shakeout and heavy culling of late 1998. Ministry statisticians warn of possible errors due to the small sample used for the March survey, but if their estimates are roughly accurate herd contraction slowed in the first quarter and the decline in young breeding pig numbers was reversed. This could confirm MLC forecasts of the breeding herd stabilising by June. Although MAFF's survey shows a dramatic 14% shrinkage of the breeding herd between mid 1998 and March, a 2% increase in the tally of dry sows and maiden gilts possibly intended for breeding is difficult to reconcile with industry lobbyists' claims of deepening crisis certain to squeeze output much harder. Instead, this hint of planned expansion could worry pig sector leaders who have privately voiced fears of too many farmers hoping to profit from countercyclical capacity management ­ not quitting the industry, but reducing output temporarily with the aim of suddenly boosting production to exploit strong prices while overall supply is tight. As the industry consolidates with fewer, more sophisticated producers controlling an increasing share of capacity, the risk is of this tactic becoming self defeating, to the benefit of purchasers. {{MEAT }}