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Hog expansion & challenges

John and Kati Hagenbuch of Utica, Illinois, talk about the growth they've taken on at their farm and some of the challenges they see ahead as young crop and hog farmers.

Thu, 7 Jun 2012|

-Here with John and Kate Hagenbuch. They're Utica, Illinois farmers and we're here talking just sort of the state of the hog industry as well as feed prices and some of the challenges that you've seen in that sector. First of all, how's the hog industry been treating you guys on your farm and tell me a little bit more I guess about your farm. -Go ahead. -We recently, actually, just expanded from a farrow-to-finish operation at home to a contract feeding operation. So, we're in the process of transitioning now. We just finished 2400 heads, set out the 1 farm with 2 barns. So, 4800 head total and we're building that second set at our home farm right now. So, yeah. -And so, has it been- has that been a tough transition or was it moving to a contract operation. I know a lot of people are doing that sort of out of necessity. Has that- was that what's spurred you to do that yourself? -Well, we do a have a green operation at home also and, honestly, those peacocks were one of the issues. We started to look at how do we expand while corn and soybean prices were really going up and that's a good thing but- so, for us, the contract feeding was a good option and it allowed us to expand where, you know, maybe down the road, we can go back to owning our own and maybe the markets won't be as volatile as they are sometimes. -I was visiting with the economist yesterday. He said, per head profit, he sees that sort of going down in the next year, but he sees corn prices also going down. So, the feed prices are maybe on the way down, possibly opening up the door to some expansion a little bit. Is expansion entered into your mind at all yet? -I'm sorry. The hog expansion? -Yeah. -I think- I think we've already jumped that gun a little bit. -What's done with expansion? -Uh-huh. That's probably, at least, another 10 years down the road for us now but- -Yeah. -We may have been that little earlier group that started that. So, yeah. -And you guys- you guys are, I guess, what we've considered younger farmers and- -Thank you. -Yeah. And, you know, it's a group of folks that, you know, we were not seeing as many folks going back to the farm anymore but, you know, we've kinda seen a resurgence just in the last year, too, of people going back to the farm and showing a strong interest in doing so and dealing with some of the challenges of, you know, high costs, you know, land availability, things like that. What are some of those challenges, I guess, did you guys go back to farming or have you been involved in farming all along? And what are some of the- there've been some of the hardest things in making that process work? -I think, probably, our biggest battle has been that generational shift in trying to just, you know, make it work for us but also working with his dad, his uncle at home. And the other thing was just that land prices are going up. Cash rent prices are so high right now. So, it's really a matter of us just being super proactive and moving forward and, you know, in a way where we're talking to people. We're talking- we're definitely really involved with industry leaders over in Illinois especially, but, you know, just moving forward and being as proactive as we can to get our ball- excuse me. Our ball rolling and making that work. -Yeah. -So, what the- what's the next 10 years? Where will you be in the next 10 years you think? -Well it depends which one of us you talk to. I think, I mean, I think we're real happy with the way that the contract is going so far. We hope that'll continue. We're hoping that that's gonna move us into a new maybe equity field where we can start purchasing some more grounds and maybe even cash running at some of those higher values. So- -All right. Well, best luck to you. Thank you very much. -Thank you.

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