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Pork Powerhouses 2009: Big boys cut back

Agriculture.com Staff 09/14/2009 @ 2:29pm

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For the first time since the annual Pork Powerhouses® ranking was launched in 1994, the nation's largest 25 producers have cut sow numbers. These companies report 200,000 fewer sows than one year ago, a drop of 6.4%. Only two firms increased sows from last year, Country View Family Farms (Hatfield) and Texas Farm. Fifteen firms reduced sow numbers, including the largest two, Smithfield Foods and Triumph Foods.

Red ink is flowing, cash is hard to get, and cuts are being made. Prestage Farms, Clinton, North Carolina, will cull 10% of its sows across all farms by December, bringing the company's total to 125,000 sows, says owner Bill Prestage. "When we cull we won't replace. This is worse than 1998 because it's lasted longer. The big thing that killed us is ethanol. H1N1 hasn't helped, either."

In Canada, the cuts started a couple of years ago. Don Janzen at Hytek in Manitoba says Canadian producers have liquidated 12-15% of the sow herd in the past two years. "The goal is to get rid of another 125,000 sows or 2.5 million pigs per year," says Janzen. "Canada used to produce 33 million pigs a year and by next year we will be down to 28.5 million. We've done our cuts, now it's up to the Americans."

Many of the largest producers report that sow cuts don't translate to market hog numbers dropping. In fact, small cuts may actually do the opposite. "If you cut 4% or less you go up in pigs produced," says Bob Christensen of Christensen Farms in Sleepy Eye, Minnesota, part of the Triumph Foods system. "You're not crowding the system and people are able to do their jobs better. You have to cut 6.5% of your sows to see a real decrease in pigs produced."

Jimmy Pollack at J.C. Howard Farms, Deep Run, North Carolina agrees. "When we were maximizing the number of pigs coming out of sow farms we had to juggle nurseries and finishers. Now we don't have to do as much juggling."

Sow productivity is at an all-time high for most of the largest companies, with many farms averaging 24-26 pigs weaned per sow each year. "That's world-class performance," says industry consultant Randy Stoecker. "People are weaning more than 11 pigs per sow and seeing less than 3% mortality from wean to finish. They cut back sows, but the output of pigs does not go down. We are strangling ourselves with production."

Most producers say the H1N1 "swine" flu virus is a big problem for the industry, bigger than was originally acknowledged last spring. "Turn on your television or open most magazines, and you hear or read something negative about meat production or consumption," says Prestage.

Export markets are a major worry for these companies. "We are very dependent on Mexico buying a large volume of our pork, and their economy has its problems," says Stoecker. "I think hope, when it comes to exports, may be a factor in the slow rate of cut back in sows."

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