Friday, May 02, 2008

Hog Farmers Feeling the Pinch

It is beginning to feel like wherever I turn I am reminded of the importance of diversified farming and the problems associated with the current specialization the industrial farm model. My latest affirmation came from an article titled, "Hog price pain is different this time around," from the "Iowa Farm Bureau Spokesman." My father-in-law dropped off quite a few issues when he stopped by this week and I found a lot of interesting articles. But, this one caught my eye right away.

As you may know, if you read this blog regularly or semi-regularly, we are planning on getting some hogs this summer. Maybe not the breeding stock that I would like to eventually get, but at least some feeder pigs that we can finish for ourselves and a customer or two. We just want to get a feel for pastured pigs and finishing them. But, whenever I talk to local farmers about getting pigs (or farming in general) I get the same response ... "There is no money in pigs (or farming for that matter)."

According to the article the pain that hog producers are feeling in this most recent price down swing is worse than they have felt in other down times (early 90's and late 90's). This is because there has been a huge shift in the hog farm structure even in just the last 10 years. In 1998 when prices dropped to the bottom it was tough on farmers, but they liquidated herds, tightened their belts, and made it through the short-lived down turn. The difference is that 10 years ago many of the hog farmers were at least slightly diversified and were growing their own corn for feed.

Now hog farmers are facing a double whammy even though they are again liquidating their herds. Most hog farmers have specialized to the point that they no longer grow their own feed and must buy in everything. This puts them in the position that they feel the pinch from low prices and from the high input costs (feed, fuel, and equipment).

I think the most interesting thing about this article article is the conclusion that it comes to. John Lawrence, who is a livestock economist at Iowa State University, concludes that there will be better times for hog farmers by the summer of 2009. Basically he notes that herds have been reduced and demand is seeing a slight up-tick, so things should get better eventually.

To me that shows a MAJOR flaw in the current agricultural mindset from the farm economists all the way to the farmers. If we look back throughout history and see that these price down-swings were not as tough on farmers when they were diversified as opposed to when they are specialized shouldn't we learn something? Maybe we should learn that farm diversification is the key?

Well, we should probably learn that, but then it wouldn't fit the "great" industrialized model we have now in agriculture! (That is my very sarcastic statement for the day)


Rich said...

"...But, whenever I talk to local farmers about getting pigs (or farming in general) I get the same response ... "There is no money in pigs (or farming for that matter)."..."

There is a chapter in one of Allan Nation's books (Pasture Profits with Stocker Cattle to be exact), that basically states that negativity can be contagious and the best thing is to distance yourself from it and negative people. Or, the only way for unsuccessful people to cope is to try and make sure no one is successful, so you can't afford to associate with negative people.

If you grow your own feed, I don't see how you could lose money by finishing hogs on a small scale. As an example, from what I've read, it takes about 12 bu. of corn (OP corn, of course) to finish a weaned pig. So, depending on your yield, 4-6 pigs could be finished on the grain harvested from 1 acre of corn. One acre of OP corn producing 60-80 bu. of corn would be turned into 1000-1500 lbs. of high quality pork that would sell for about $1.50/lb. ($1500-$2250). Sounds like a money-making operation to me. If you combined pasture access with feeding OP corn (or barley or wheat), it seems like it would be even more profitable.

Yeoman said...

This article is sort of vaguely on topic here. I ran across it on the Wendell Berry web list:

I don't know what to make of the fact that the web version of it also brings up an add for "Sonic", the fast food joint.

Steven said...

That was an interesting article, and I was encouraged to hear about the commission and what they are looking into but I don't think I agree with everything...

Below are the Commission’s key recommendations.

1. Ban the non-therapeutic use of antimicrobials in food animal production to reduce the risk of antimicrobial resistance to medically important antibiotics and other microbials. (good)

2. Implement a disease monitoring program for food animals to allow 48-hour trace-back of those animals through aspects of their production, in a fully integrated and robust national database. (not so good)

There were more recommendations too. The majority of them were MORE government involvement. That's too bad because the government involvement is usually what starts the problems... ie: government mandated ethanol = budding food crisis.

ryne said...

"There is no money in pigs" I just had someone say that to me last week. We too have dreams that involve raising pigs naturally. We were working our way towards that dream but have held off as we are unsure about the current situation in the market. We have been following the dream for a while but more seriously for the past couple of years... we moved back to Iowa from Chicago last summmer. I grew up working on our farm and have worked on other farms off and on for years. We were introduced to sustainable agriculture a couple of years ago while taking a Farm Beginnings class in Illinois... can you believe that we had been in and around farming our whole lives and just recently heard of this? (I'm 27 years old) Ever since, our ideas on farming have evolved. I stumbled upon your blog and have enjoyed reading it. I have not been able to read them all but have been working my way through them.

Ethan Book said...

Rich - You are right about negativity breeding more negativity and about the natural desire for others to suffer if you are suffering. Also, that is a good point you bring up about hogs. I think it is totally true if you are talking about a low input grain operation, but once you begin going conventional in your grain and hog production the numbers probably fall off. That is why unconventional is the way to go in my mind!

Yeoman - That certainly is an interesting article, but I am slightly dissapointed with their conclusions. What is wrong with going back to small family farms (see some of the historical quotes from Saturdays post).

Steven - I'm with you...

Ryne - I'm glad you stumbled on to the blog. Stick around a while and you should glean some pretty good information from all these intelligent commenters! Also, that is cool that you were able to attend one of those farm beginnings classes. I have yet to be able to attend some of the classes or seminars that I would like to because my schedule has always gotten in the way.

Yeoman said...

Steven, I fully agree with your comments on the article.

Also, I'd note this. On this topic, whenever we hear about suggested reforms of this type, by outside bodies, there's always "we can't go back."

Sure we can. We just have to want to.

Oh, I know we can't go back to 1789, but we can sure go back, as a nation, to family farms. We only have to want to.

Yeoman said...

Ethan, I'm just reading down the replies. You have said:

"Yeoman - That certainly is an interesting article, but I am slightly dissapointed with their conclusions. What is wrong with going back to small family farms (see some of the historical quotes from Saturdays post)."

You are absolutely correct. The "we can't" is an example of intellectual blindness. Of course we can. There's utterly no reason this country couldn't construct a farm policy truly encouraging family farms.

It actually would be quite simple. When the nation started off, corporations were rare. To get us back to the status quo of that period, we could restore things to that status in farming. We could do this simply by providing that farm ground had to be held by "agricultural corporations" or individuals. An "agricultural corporation" would have to have shareholders who all derived, let's say, 50% or more of their income from actually using the ground in farming.

Sounds radical, but in actuality, the present situation is the historically radical one.

Foundation Farm said...

Another reason this down turn in pork prices is worse (will be even worse?) is because of the nature of pork production. Now that pork is being produced on an industrial scale, these corporations seek any way to minimize losses. If feeding pigs and marketing them only loses $100 000, but leaving the barn empty loses $200 000, these people will continue feeding pigs. There is simply no way to get out with your "shirt" if you have the kind of money invested in infrastructure that these large pig feeder do.

Ethan Book said...

Foundation Farm - Great point you bring up! More small farms makes a better America I would say...

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