More turnover and consolidation facing pig farmers
The coronavirus pandemic has accelerated trends in the pig business, says Brad Hennen, Ghent, Minnesota. Hennen finishes pigs for Lynch Livestock, as part of its antibiotic-free production system, and is a salesperson for breeding stock company Fast Genetics.
He is seeing more turnover of farms this fall in Minnesota and South Dakota. “The flux in the industry due to market challenges is one of the things I worry about most,” says Hennen. There was consolidation in the industry before COVID-19, and now it is worse, he says. “Historically in farming we like to see a broad base of ownership, and that is gradually escaping us. In troubling years like this, those trends are accelerated. I am worried about who the winners and losers are going to be.”
If your operation was doing well production-wise and you had a good relationship with your packer, particularly one that compensated your operation based on cut-out prices rather than the Iowa-Southern Minnesota market, you probably are doing at least as well now as you were before the coronavirus hit, says Hennen.
Older operations that were health challenged before COVID-19 are often being emptied, he says. “A lot of those have voluntarily decided they are not going to weather the market, so they are depopulating the herd and will decide later whether to re-pop.”
Especially vulnerable are farms located in areas where diseases are a perennial challenge, he says. If those operations repopulate, it is often with a new genetic supplier.
Farms that sell feeder pigs or isowean pigs are really hurting, says Hennen. “Those markets can be quite fickle, so some of those producers have exited the business. The operations that were really struggling before this hit are the ones hit the hardest.”
Hennen is slated to become president of the Minnesota Pork Board (MPB) in January. In the past six months, almost all the groups’ activities with consumers, such as at the state fair, were cancelled. “We are doing more consumer outreach in social media, developing videos that share our story with our consuming public,” he says.
Hennen is also chair of the research committee for MPB. For the last couple of years, the group has been addressing the potential challenge of African swine fever and other foreign animal diseases affecting the pork supply chain. There has been research on how to handle mass euthanizing and disposal of pigs by composting. That work will continue.