Pork Powerhouses 2019: Expansion Continues

The exclusive ranking of the Top 40 U.S. pig producers shows 69,000 more sows.

The nation’s largest pig producers added 69,000 sows in 2019, according to the annual exclusive Pork Powerhouses® Top 40 ranking by Successful Farming magazine. The total sow count for these largest producers, at 4.29 million, adds up to about two thirds of the sows in the U.S.

Download the exclusive ranking: pork-powerhouses-2019

Breaking down the list, about half (19) of the companies added sows, nine decreased numbers, and 12 stayed the same. Of the companies adding sows this year, only a few did it by acquisition; the majority of the growth was new construction. 

Smithfield Foods

The largest producer, Smithfield Foods, owned by the Hong Kong-based publicly traded company WH Group, reduced sows this year to 930,000 from 950,000 in 2018. Part of the reduction was the sale of about 13,000 sows in Wyoming to The Maschhoffs in October 2019.

The biggest challenge to Smithfield’s business today – and to the entire pork industry – is public perception, says Brady Stewart, executive vice president of U.S. hog production. “It’s fueled by a vocal minority who spread falsehoods about our industry,” he says. “They do not understand modern agriculture and intentionally ignore the important role it plays in feeding the world’s growing population.”

Smithfield works to correct the falsities “by proactively and transparently bringing people behind the scenes of our operations,” says Stewart. “In doing so, we hope to change the misperceptions that cause damage to our business.” That will also benefit other pork producers, he points out.

Disease Risks

Disease is always a challenge with swine production, with PRRS being the No. 1 health risk for the largest producers for most of the past three decades. “With PRRS, we know what to do when we get it, but it’s hard to keep from getting it in our part of the state,” says Dave Eichelberger, Wayland, Iowa. Any future sow growth for his family-owned company will probably be out of the PRRS belt in Iowa and in surrounding states like Missouri and Illinois. 

This year, the very real fear that deadly African swine fever (ASF), now spreading throughout Asia, could reach the U.S. is also top of mind for the largest producers. The risk is real for Smithfield, says Stewart. ASF has not been found on any Smithfield company-owned farm globally, but it has been reported in areas of Poland and Romania, where the firm has operations.

Smithfield is preparing for ASF by enforcing strict biosecurity policies and procedures on all farms, both company-owned and contract, says Stewart. “This policy applies to every step of the animal production process, including the movement of animals, personnel, equipment, and vehicles between farms.”

All employees and visitors have to shower in and out of farms. All equipment and supplies delivered to farms are disinfected. 

Veterinarian Gordon Spronk, with Pipestone System, Pipestone, Minnesota, has witnessed the damage from ASF. Pipestone has minority ownership and management for nearly 70,000 sows in China. Two of the company’s sow farms and several contract growing farms broke with ASF. In one contract farm, 96% of a 2,400-head group died within 19 days. “Chinese authorities now recognize that movement of live, infected pigs may have contributed to the problem of moving the virus around the country,” says Spronk. 

Reports indicate that a significant portion of China’s hog herd has been and will be lost due to ASF by 2020. Chinese hog prices continue to trend higher, while pork imports have intensified, and Smithfield anticipates that will increase in the months ahead, says Stewart. “However, the benefit to the U.S. pork industry is likely to be muted until there is improvement on the trade front.”

Trade Issues

Trade is another issue top of mind for the Pork Powerhouses®. One quarter of the 150 million pigs slaughtered in the country each year is exported. Trade tensions between the U.S. and China have resulted in retaliatory tariffs, including pork, raising duties on pork exports for the past year. There is no clear time line for a bilateral trade agreement between the countries.

“For this reason, we support the vigorous pursuit of new trade agreements with export partners, the removal of retaliatory tariffs, and the reduction of current tariff and non-tariff barriers in order to increase exports,” says Stewart.

Do these global challenges mean Smithfield will continue to cut back in production? Not necessarily, says Stewart. “We have set strategic growth goals to maintain our industry leadership position.”

China backing away from U.S. pork has hurt the industry deeply, says Myrl Mortenson, president of The Hanor Company based in Enid, Oklahoma. “We were all hoping for a banner year and we didn’t get it. We have a lot of meat we have to do something with. If we can’t get China to take a bunch of this meat out of this country, I don’t know what will happen. However, if the Chinese trade deal really does happen, it will be a once-in-a-lifetime opportunity.” 

Hanor is still moving ahead, despite the risks, says Mortenson. Life on farms must go on. “We spent $30 million on putting all new wider farrowing crates in all our farms,” he says. “Sows are bigger today, and the crates are 20-plus years old. We also switched a bunch of farms from stalls to pens. It cost more to retrofit these farms than when we built them brand new.”

How does he like the pens? “At first, we didn’t like them, but now our people are getting used to them and the pigs are getting used to them, and it’s getting much better,” says Mortenson.

Changing Hands

Several transfers of ownership took place this year. Maxwell Foods, based in Goldsboro, North Carolina, is selling 30,000 sows in North Carolina and 15,000 sows in Indiana to Clemens Food Group of Hatfield, Pennsylvania. The agreement is expected to close in late 2019. The sale includes the assets of Maxwell Farms of Indiana, Maxwell Milling of Indiana, as well as breeding stock in North Carolina that is dedicated to supplying pigs for grow-out in Indiana. Before the pending sale, Maxwell Foods had 99,000 sows, and Clemens Food Group had 66,000 sows. 

The Maschhoffs, a family-owned hog production company based in Carlyle, Illinois, sold a group of 16,000 sows and related assets in eastern Nebraska earlier this year to Pillen Family Farms of Columbus, Nebraska. In October, Maschhoffs closed on buying sows in Wyoming from Smithfield Foods. The Illinois company ended up with 9,000 fewer sows than in 2018. 

Top states where companies are headquartered in 2019:

Iowa: 9

Minnesota: 8

North Carolina: 5

Ohio: 4

Illinois: 3

Other large farms:

Ernest Smith Farms / Garland, NC: 22,000 sows

Heimerl Farms / Johnstown, OH: 21,000 sows (a producer partner in Clemens Foods)

Belstra Milling Co. / DeMotte, IN: 19,000 sows (a producer partner in Clemens Foods)

Dykhuis Farms / Holland, MI: 19,000 sows

New Horizon Farm / Pipestone, MN: 16,500 sows

Hitch Pork Producers / Guymon, OK: 16,000 sows

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Betsy Freese can be reached at betsy.freese@meredith.com

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