Pork Powerhouses: Midwest sows on the rise
The 25 largest U.S. pork producers grew by 84,000 sows this year, according to the 2011 Pork Powerhouses exclusive report. Ten of the companies on the list expanded, 12 reported the same number of sows, and three have fewer sows than last year (including the largest, Smithfield Foods).
The biggest jumps are by Illinois-based The Maschhoffs, which bought 50,000 sows from NPP (Nebraska Pork Partners), and North Carolina-based Prestage Farms, which bought Smithfield’s Texhoma, Oklahoma, farrow-to-finish operation.
Overall, the mood among the big producers is extremely cautious. Corn priced as much as $8 a bushel means slim profit margins. Smithfield continues to downsize its sow herd, and will take 30,000 more sows out of production on the East Coast by the end of the year, says Joe Szaloky, vice president of business development and planning. The company has already cut 39,000 sows in the past year (42,000 worldwide).
Smithfield’s approach for addressing the increased volatility in the marketplace is to focus more closely on raising hogs with minimal losses in the process. “Sows are getting more productive, so we have a lot more pigs and not enough space to efficiently grow them,” says Szaloky. The company has implemented a new sow contract, in effect since August, which compensates for heavier pigs weaned at an older age, increasing sow productivity, and a consistent flow of pigs. Szaloky says, “we expect on farm sow inventory levels to continue to decline as increased sow productivity allows fewer sows to populate the downstream grow-out space.” In addition to the increased focus on sow productivity, the company expects improved down-stream results as a result of the changes on the sow farms and increased weaning ages.
Szaloky doesn’t expect a big change in output of pork from their system, because sows are producing more pigs and market weights are going up. The target now is 275 pounds, versus 255 two years ago. In another two years it will be 285 pounds. “At the end of the conversion we will have the same pounds of pork and 30,000 less sows,” he says. “There will be an increase in average daily gain and a decrease in mortality and cull rates.”
Smithfield sold its 21,500-acre Dalhart, Texas, sow operation, empty since 2009, to Cargill. The units are being restocked by Cargill to produce pigs that will be transferred to Midwest grow-out facilities, many of which still have to be built. “It is a long slow process to add sows at the Dalhart location,” says Jeff Worstell, vice president of livestock production with Cargill Pork. “The sows will be bred and their offspring will be used to populate the facility. We started breeding in September, so it will be next summer before there is much growth.”