Pork producers are facing an unprecedented crisis unlike anything the industry has ever seen, and unless they receive significantly more help from the federal government, thousands of pork producers could shutter their farms forever. That would be bad news not only for hog farmers and the industries that depend on them and support them, but for United States consumers.
That was the stark message at a call-in conference sponsored by the National Pork Producers Council May 28.
Opening remarks were made by Howard A.V. Roth, a pork producer in Wauzeka, Wisconsin, who was just elected NPPC president in March. A fifth-generation farmer, Roth owns and operates Roth Feeder Pigs. In addition to serving on the NPPC board for the past eight years, Roth previously sat on the Wisconsin Pork Association board of directors and currently serves as chairman of the association’s Swine Health Committee.
In prepared remarks, Roth urged the U.S. Senate to “expeditiously” adopt livestock agriculture support provisions included in the Health and Economic Recovery Omnibus Emergency Solutions Act recently passed by the House of Representatives. The $3 trillion, Democratic-sponsored bill has been pronounced “dead on arrival” by Senate Majority Leader Mitch McConnell, but Roth urged the Senate to include the agricultural support provision in the next COVID-19 relief bill. Roth said agricultural relief in the earlier CARES Act totaled $1.6 billion, while hog producers alone face losses of up to $5 billion this year, not including the added costs of euthanizing and disposing of hogs for which the constrained meat processing system has no room.
Roth and the other speakers repeatedly stressed that compensation for the costs of hog euthanasia was crucial if hog farmers were to remain viable. Roth said new aid should remove payment limits to farmers, a feature of the earlier aid. “No one is asking to be made whole, necessarily,” said Roth; just to be able to survive.
The HEROES bill would provide another $50 billion to beginning farmers and ranchers. The bill directs the agriculture secretary to make payments to covered producers to offset losses related to the intentional depopulation of market-ready livestock and poultry due to insufficient regional processing access. For the first month following an initial date set by the secretary, the payment rate will reimburse a producer for 85% of the losses determined by the secretary. For each subsequent 30-day period, the payment rate will decline by 10% of the value of the losses.
The NPPC wants expanded direct payments, without payment limitations, to livestock farmers who have suffered severe losses as COVID-related market disruptions erased the values of their livestock. It is also calling for increased funding for animal health surveillance and laboratories, which have been tapped to perform COVID-19 testing.
No return to normal
Mike Paustian, an Iowa hog producer and president of the Iowa Pork Producers Association since January, said he was worried that American consumers are concluding that the meat supply situation was returning to normal as shelves are restocked. “That’s not the case,” said Paustian. “My wife and I were weaning pigs today, and I kept asking myself, ‘Is there a future for these pigs?’ The 10-month pork production cycle has been severely disrupted. It’s crippling for farmers to be in this situation. It’s hard on farmers and on our suppliers and partners. We’re trying to make the best of a very bad situation, and there’s no end in sight.”
Kevin Hugoson, a fourth-generation hog farmer from Granada, Minnesota, said producers are facing unsustainable losses of $60 to $70 a pig. The coronavirus crisis “has completely changed the way American agriculture looks.” He said his daughter recently returned to work on the family farm, which would make her the fifth generation of the family to do so—one of the “greatest joys” farm families experience. But with the dire financial implications, he said, the next generation is questioning the continued viability of hog farming.
Hugoson spoke of the impact of the pork crisis on “finish producers”—farmers who rent out their barns and equipment to nearby producers, who pay them to house and feed hogs during part of their life cycle. “As the pork industry goes, the whole farm economy goes,” he said.
Pork producer Chad Leman, too, said he hoped at least one of his four daughters would take an interest in the family business. His Leman Farms, in Eureka, Illinois, normally raises 90,000 hogs a year, along with corn and soybeans. The operation has grown steadily over the past 30 years, but “the past two and a half months have felt like a lifetime,” he said. His greatest fear has been the threat of shutdowns by packers whose employees get sick with COVID-19. He said his operation changed the hogs’ diets to keep them from growing too fast. Barns have also adjusted ventilation, as they are now housing pigs in all stages of growth and at all different weights.
Firm figures hard to come by
None of the panelists had firm figures on the numbers of backed-up hogs or how many might be euthanized, but NPPC staffer Neil Dierks said based on figures from the U.S. Department of Agriculture, about 100,000 to 150,00 hogs per week are backing up for an estimated total of anywhere from 2.5 million to 3 million hogs. “We do know that there’s no room for many of these animals,” he said. Leman said 4,000 hogs have backed up at his operation, and local pacing plants are running at 75% of capacity. “With pork production, you can’t just shut off the spigot and turn it back on again.”
All the producers spoke of their efforts to remain positive for their employees. Their employees are distressed at the prospect of possibly having to euthanize pigs. Paustian said, “We’re talking all the time about putting the pigs first. It goes against everything they’ve been trained to do. We have a saying in my operation, ‘The pigs eat first.’ They eat before we do. If something in the barn needs to be addressed, we get up from the dinner table and fix it. Even talking about contingency plans [for euthanasia] is very demoralizing for these employees.” He said the role of faith is important in keeping up morale. The agricultural support provisions in the HEROES bill includes support for farmers’ mental health.
In the question period, Dierks said the industry will be considering expanding the use of co-op processors, as Secretary of Agriculture Sonny Perdue has suggested. Anecdotal data suggest co-op processors are operating normally. He said the NPPC did work on this issue in the 1990s and will expand discussions on this option, but it’s a longer-term solution.
Dierks praised the earlier USDA Food Box purchases, which purchased some excess commodity meat, but said they were not enough. Even before the processing plants started closing, the COVID crisis severely affected pork producers by closing schools and other large institutional purchasers of pork products. He estimated the closures will cost pork and dairy producers $100 million a month for six months.
Sign up for HPJ Insights
Our weekly newsletter delivers the latest news straight to your inbox including breaking news, our exclusive columns and much more.
Leman has been impressed by the reactions of his employees to the crisis. “They didn’t need to be told they were essential. They knew their job was to put the health and welfare of the pigs first.” While he still supplies to some packers, he said packers can’t give much lead notice. Managing pig weights and wastes imposes added costs, even as the price of hogs plummets. “It’s humbling to know we’ll need further help to continue to supply pork to consumers,” he said.
“Without further help,” said NPPC staffer Nick Giordano, “we will lose a significant portion of the industry.”
David Murray can be reached at [email protected].