Columbus, OH - Last year, Jeff Duling converted his 600-acre hog farm in northwest Ohio from a birth-to-market operation to one that raised young pigs until they are ready for market.
Then one of the worst price crises in the history of the pork industry hit. Duling had based his investment in the operations change on earlier market conditions and ended up with $80,000 in losses.
“I think the hog market is going to come back, but it's going to take me two years to get back what I lost in two months,” said Duling, 32, who raises hogs in Ottawa, 50 miles southwest of Toledo.
Hog prices are slowly edging up to the break-even point after plunging so low last fall that farmers nationwide were losing $50 to $75 a pig. Now, Ohio pig farmers and their suppliers are rethinking their position in the industry.
“At first this crisis last quarter hurt the producers,” said Bryan Black of Canal Winchester, president-elect of the Ohio Pork Producers Council and a 300- sow farmer. “This quarter it hurt not only the producers but people they do business with.”
Black, 38, said some owners of small farms were finally forced out of business by the crash in prices. He predicts the next shakeout will come in the spring, when bigger producers return to the banks to talk refinancing.
Some analysts have blamed the low prices on overproduction by megahog farms. Federal officials are also investigating allegations of price-fixing by large meatpackers.
Mark Murphy is sales manager with Birchwood Genetics in West Manchester, about 25 miles west of Dayton. The company sells boar semen to hog farmers across the United States.
“We're affected more now than when prices were tough because of our position in the pork chain,” Murphy said. “Our biggest downfall is we operate so much off of cash. When the cash isn't there, we're not prepared for a crisis of this kind.”
The company tightened its belt but hasn't had to lay off any of its 22 employees yet. Another round of low prices would cause serious trouble, Murphy said.
Jim Schnipke, 61, raised hogs for more than 35 years in Ottawa. He said Monday the low prices made him decide to sell his 100 remaining sows and get out of the business of raising pigs independently. He might take hogs back on contract, where he simply feeds and tends the animals, for which he receives a set fee per pig.
Marion Horton in nearby Hancock County figures he was losing $1,100 a week during the worst of the crisis. He reduced his inventory from 600 pigs to about 100.
He's going to stay in business for now because at age 67, he doesn't have the debt that hangs over younger farmers' heads. But he's keeping an eye on the future.
“I'm not going to keep on raising hogs until I lose the farm,” Horton said.
Meat Industry Insights News Service
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