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Wed September 19, 2012
Low feed means more hogs sent to market
The gravel road leading to Harrison Creek Farms is sandwiched between one field of withering corn, and one field of stunted soybeans. The drought has hurt farmers like Kenny Brinker who owns Brinker Farms and Harrison Creek Farms in Auxvasse, Mo.
“The hog farm we have here in Callaway County is what you call your standard feral to finish operation," he says. "We own the hogs ourselves."
Brinker has been farming in Auxvasse since 1998 but has been in the fields all of his life. Brinker Farms grows corn and soybeans that are used to feed his 2,800 hogs. He has been keeping track of his yields since he has started farming and says that yields this year are even lower than during the drought of 1980 which is the worst one he can remember.
Brinker says it’s basic economics: the drought hurts the growth of corn and soybean plants which are used in hog feed. The low supply of hog feed can’t meet high demand of hog farmers so prices go up.
“Back in June, soybean meal was back in the 200 dollar some range," he says. "I think as of yesterday it was 537 and corn got down as low as $5 or $5.50 range and this week we have been paying an excess of $8 a bushel for it. So it really has impacted the bottom line.”
Livestock producers can’t afford to feed all of their animals so they are forced to take more to market. This floods the marketplace and drives prices down.
“Right now an average market hog if it weighs 280 pounds on the marketplace will sell for around $150 to $155 and that’s about what the feed costs are,” Brinker says.
Some hog producers are being paid so little money for each hog that they are only able to cover the cost of feed.
“During the fourth quarter of this year it could be the worst quarter the hog industry has ever experienced and we could be looking at losses up to $60 for every market hog we sell,” Brinker says.
Don Nikodim, executive director of the Missouri Pork Producers Association, says that the low prices are good news for the consumer now but not for the long term.
“Well if you think about it right now -- and I’m talking from a consumer standpoint -- you are seeing a lot of meat on the market place which is making the meat prices more competitive," he says. "The fact that we are killing a lot of cows and a lot of sows from the breeding herds...eight, 12, 15 months down the road you will be seeing less animals born. Well, they will be born in a shorter time than that, but the fewer number born will mean less available for the meat supply. You will see a shortage 12 to 15 months out.”
That shortage of hogs in the next 10 to 12 months will cause prices of pork to rise for consumers, according to University of Missouri agriculture economist Ronald Plain.
“Really, the drought has affected all phases of our society," Brinker says. "It is really going to affect the consumer ultimately and I think that is the concern that most families in the United States are concerned about how much it affects the food that they put on their table every evening.”
Brinker says he hopes not to have another season like this one for another 30 years.
This story originally aired as part of Business Beat, a weekly program about business and economics in mid-Missouri.