Region’s Hog Industry Rattled by Coronavirus

It’s no secret that hogs are an important economic driver in southern Minnesota and northern Iowa.

Iowa is the number one pork producing state in the U.S. Nearly one-third of the nation’s hogs are raised in Iowa, on one of the state’s more than 6,200 pig farms. Iowa producers marketed almost 48 million hogs in 2018.

Minnesota, meanwhile, ranks 2nd in the value and number of market pigs raised. The state’s hog farmers marketed 16.6 million pigs in 2018.  Over $6 billion in economic activity is generated each year thanks to Minnesota pork production. The hog industry also creates and supports an additional 44,000 affiliated jobs in construction, trucking, feed milling, accounting, food processing and more. Hog production creates demand for millions of bushels of corn and soybeans needed to feed those animals.

Positive COVID-19 cases have forced the temporary closure of several Midwestern meat packing plants. The repercussions are being felt throughout agriculture.

“One thing that’s immediately upon us is how to maintain stream of live production to the processor,” says Gary Koch, vice chair of Christensen Farms of Sleepy Eye. “To the extent that processors close or reduce capacity, the ability to deliver hogs is impaired. If the ability to deliver hogs is disrupted, then producers have to figure out what they’re going to do with those animals on an intermediate term basis.”

Hog production and meat processing are closely aligned so there is a nearly continuous flow of animals from the farm to the packer, then to the consumer. Disruptions at the processor creates a logjam along the supply chain.

“At some point there’s no longer room for everything. So you have to look about for all kinds of alternatives, with respect to maintaining stocking densities with buildings that are acceptable for the workforces and the animals, that may lead to the need to cull herds in order to keep the facilities from being overcrowded,” Koch explains.

Christensen Farms has about 1,000 employees and 1,500 contracted growers. Plant closures are being felt all along the supply chain, but the priority remains with the people involved.

“On the front end of this, we were very focused on the impact to the people and our farms,” says JoDee Haala, director of public affairs for Christensen Farms. “We’re making sure that people are protected and that they aren’t having to choose between having a paycheck and having to stay home to care for a family member or a child, or feeling like they need to continue to come to work if they are feeling ill. Making sure that the employees are taken care of and feeling supported through this, is priority number one.”

In addition to plant shutdowns, the temporary closure of restaurants and food service venues has also had a negative impact on the hog industry. Haala says a large portion of the nation’s bacon supply is sold to food service. Bacon also props up the entire hog carcass value.

“When it comes to the value the producers are being paid, that has eroded substantially because there is limited demand for bacon,” Haala says. “It’s all basic economics–supply and demand. Right now, we’ve seen value fall out for producers in a very substantial way that’s impacting their income.”

Plant closures are also forcing some farmers to euthanize otherwise healthy hogs because there is no room for processing.  Many farmers have changed how they feed the pigs to slow their growth, but that only works for a short period of time.  When the pigs get too large, the processing facilities physically can’t harvest them.  It’s an unthinkable situation for farmers whose focus is on caring for animals to ensure a safe, healthy food supply.

There is also concern that loss of processing plant capacity, even temporarily, will affect the nation’s food supply. Minnesota’s pork industry leaders are working to navigate these challenging times.

“What the struggle is about right now,” Koch says, “is how to manage and enable the supply chain that provides food to people to survive this crisis and come out on the other end.”

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