December 1, 2020

 

US Upper Midwest to see growing swine herd: livestock economists


 

US livestock economists are predicting that rising pork demand overseas will result in an industry-wide expansion in the Upper Midwest, from finisher barns to processing plants, The Storm Lake Times reported.


Steve Meyer, an economist with Kerns & Associates in Ames, says that the expansion will take the form of a series of new finisher barns over the next three to five years and a new processing facility when the finisher barns are complete.


He likened his expectation, which he says is shared among industry analysts, to the building of several finisher barns across Northern Iowa over the last five years and the Eagle Grove and Sioux City facilities in 2016.


The industry is seeing a 22% increase in year-over-year foreign pork demand, while domestic demand is forecast to be flat.


Iowa State University livestock economist Lee Schultz adds that the US' main buyer, China, won't rebuild its swine herds, which were decimated by African swine fever, until 2024.


Commenting on overseas markets, Meyer opines: "So long as the Biden Administration supports free trade, we have no reason to believe our export markets will be down anytime soon." "The U.S. has the infrastructure to be the world leader in protein production."


The Upper Midwest, particularly Western Iowa and Minnesota, is set for an expansion because swine producers were able to maintain their herds throughout the Coronavirus pandemic, Meyer explains.


However, Meyer questions whether state governments are willing to tolerate a continued expansion of hog barns due to odour concerns. Nonetheless, he believes the industry can keep such concerns at bay, relative to similar issues in the Southeast where there are acute water quality problems caused by animal farming.


Schultz is also confident that Upper Midwest producers and meatpackers demonstrated a resilience during COVID-19 that will prompt new investment. At one point, US pork processing capacity slumped 40%, a record gap, leading to a three-million-head backlog.


According to Meyer, that backlog was wiped away six weeks ago largely because packing plants secured sufficient labour to resume full production on Saturdays. Farmers also worked with land grant university researchers to slow diets to delay hogs reaching market weight by up to four weeks. 


"People were watching with a close eye on how we would do through the virus, and how we performed was much better than everyone expected," Meyer notes. "It only took a matter of a few months to work through the largest livestock backlog in history… I'd say we passed the ultimate stress test."

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