Empty Barns: Several Factors Shrink U.S. Swine Herd and Slow Expansion
Expansion Breaks 060822
Coming off a record year of profitability in the pork production sector, one might expect expansion in the U.S. pork industry. However, a number of headwinds, including diseases like PRRS and PED, are keeping numbers down from 5 to 6 percent over a year ago.
Dave Mensink, a pork producer and former Minnesota Pork Producers Association president from Preston, Minn. says, “A lot of empty barns is what I’m hearing also. A lot of empty barns in the industry because of disease pressure.” He says he has 'put the brakes' on expansion. “The hog slaughters are reduced 5 to 6 percent because we’ve had such disease in our industry. One of the biggest challenges that we have is, if we are going to expand, we’ve got to do it in a way that we can have healthy pigs.”
This might be part of the reason several new hog facilities have been built in South Dakota, where pork production has been growing at a rate of 7 to 8 percent each year. "The attraction is primarily the fact that we don't have the hog concentration some of our surrounding states have and that makes it very conducive to come to South Dakota,” says Glenn Muller, South Dakota Pork Producers Council executive director.
Muller says, so far, they’ve seen less herd health issues over the last several months. "Iowa, Minnesota and Nebraska are seeing more population density of pigs and therefore have more exposure and more risk associated than we do in South Dakota."
EverAg economist, Dr. Steve Meyer, noted disease isn’t the only issue limiting expansion. “Number two is we’ve had labor problems all over the place, including at the production level. Number three is the cost of building these buildings just went out of sight last year. And then there’s the availability of work just to get a building put up.”
High input and feed costs are also making pork production less attractive. Mensink says, “The feed prices are high and to bring all this back is going to take a few months. It might even take a year before all this production is back in line, and then it's still a question of what’s our feed prices going to be a year from now?” Fortunately higher hog prices have offset some of the cost, but his margins will still be under 2021, Mensick adds.
Last year, low cost pork producers made a record $20 per head and average producers made $10, Meyer says. However, producers will likely be under that mark this year with the climbing cost of production.