January 28, 2013

 

 

Iowa's hog producers are expecting profits by 2013 despite business pitfalls.

 

"Right now hogs are losing about US$5 per head, but we hope that by summer things will be back to profits," Bill Tentinger of Le Mars said at the Iowa Pork Producers Association's annual Pork Congress this week at the Des Moines Convention Centre.

 

The pork industry is buttressed by strong exports, particularly to Asia. Demand for pork was strong through the Thanksgiving-Christmas holiday season and is expected to stay that way this year as beef producers face record-high prices.

 

"We expect more demand to drop from beef to pork this year," Tentinger said.

 

Tentinger keeps 375 sows in Plymouth County. He cut his sow herd by about 40 animals last year as the drought raised feed costs. He is confident that the near feature for pork is strong enough for him to bring his herd back up above 400 animals for the 2013 farrowing (birthing) season.

 

Most of Tentinger's fellow producers think the same way. Come drought or falling prices, Iowa's nation-leading hog inventory numbers remained at a record 20 million through all of 2012 and likely will stay there in 2013, Tentinger said.

 

Feed costs are high, to be sure. A typical hog will eat nine to 10 bushels of corn during its six-month life to reach the requisite 270 pounds for slaughter. A decade ago, those 10 bushels would cost US$300. Today they cost US$700. But that has not deterred Tentinger and other Iowa producers.

 

Iowa's hogs generate US$5-6 billion in sales and support a network of processing plants around the state, not to mention equipment manufacturers and seed-stock genetics companies. Despite the hog industry's long tradition of being a bulwark to Iowa's economy, the industry has had its share of public relations problems in recent years.

 

In 2012, the issue of hog confinements came back to the front burner in many counties as producers expanded or modernised facilities built in the 1990s, a trend Tentinger said will continue this year.

 

Incoming association President Greg Lear, who runs a livestock feed company in Spencer, is well aware of the challenges the hog industry faces.

 

Besides the hog confinements, the major issue producers face is gestation crates used by four out of five hog producers. The crates house the sows that give birth to more than 35 million hogs annually in Iowa. Producers say the crates are necessary to keep temperamental sows from biting each other. Animal-rights advocates say the crates are cruel, and they have persuaded several supermarket and restaurant chains to announce plans to phase out gestation-crate hogs from their retail offerings.

 

Lear lamented another issue that he said needs attention from livestock producers: changing dietary guidelines for school lunch programmes, overseen by the USDA that cut the amounts of allowable calories. Most school lunch programmes cut back on red meat to pare down the calorie counts. The new guidelines generated protests from livestock producers, not to mention hungry kids, when they went into effect this school year.

 

The USDA seemingly relented in late December, saying that schools could add more meat to the lunch menus, but did not change the calorie counts.