The Free Press, Mankato, MN

Local News

July 12, 2009

Pork prices described as crisis

Many producers 'at the absolute edge'

By Tim Krohn

MANKATO — Mitch Truebenbach, like other hog producers, was losing as much as $25 on each pig he sold for more than two years. Early this spring, things started looking a bit brighter.

“Guys were just starting to break even when the ‘swine’ flu came. Then it just plummeted. The problem is CNN and the national media are all still calling it swine flu. The exports just dropped. It’s been brutal.”

David Preisler, executive director of the Mankato-based Minnesota Pork Producers, said that between one-quarter and one-third of the state’s pork producers “are on the absolute edge.”

On Tuesday, Truebenbach and other producers from across the Midwest are hosting a free pork feed in Mankato for the public and a meeting for producers to discuss the latest developments in the industry.

Lynch Livestock will provide the lunch from 11 a.m. to 1 p.m., serving pork loin, pork sausage and pulled pork outside the Mankato Harley Davidson store off Highway 169 in North Mankato.

A Crisis in the Swine Industry meeting will follow at 1 p.m. at the Best Western.

Truebenbach, of Aberdeen, S.D., grew up near Nicollet and operates hog operations in this area and South Dakota. He decided to help organize the Tuesday event to counter the negative publicity the industry has had because of the so-called swine flu. Many consumers in the United States and other countries have mistakenly assumed pork is unsafe or can transmit the virus.

But the virus is not a food-borne illness. The virus contains avian and human components and no pig so far has been found ill with the disease.

Government and health agencies have taken pains to stop referring to the HINI virus as “swine” flu, but the label has stuck with much of the public and news outlets.

Preisler said the flu publicity dried up exports to Mexico, the second largest importer of American pork.

While producers expected to be near the breakeven point this year, Preisler said hog producers in Minnesota alone are now expected to lose some $500 million.

Minnesota produces 15 million hogs a year, second only to Iowa.

Hog and other livestock prices have been battered in recent years by high grain prices, which increased feed costs. Grain prices reached record levels because of increased world demand and more use of corn in ethanol plants. Corn and soybean prices have moderated some recently.

Truebenbach said the high production prices, coupled with the flu scare, have brought the industry to the brink.

“There have been quite a few (producers) going out of business. There’s a lot of them right on the edge and I think the lenders are really going to force the issue now. A lot of producers are leveraged up,” he said.

Truebenbach said that in the past when a producer went out of business, their large barns were taken over by a bigger producer.

“Now the big guys can’t even make it. I don’t know what’s going to happen.”

The USDA reported last week that the national hog breeding herd was down 2.7 percent in June. But increased productivity is offsetting much of that decline. Pigs per litter were up 2.5 percent the last four quarters.

Hog producers have lost money 19 of the last 21 months. Today's prices are roughly $15 a head below breakeven.

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