Uncertain future: Pig farmers face tough decisions in wake of packing plant closures
Eric Lockhorst got in the pig business to make his corn and beans worth a little more. But at times in the last two years, he’s given his corn away, as hog prices drop below the break-even point. Now, as COVID-19 shuts down packing plants, and forces farmers to face euthanizing their barns full of pigs, he’d be happy to give the pigs away too.
Smithfield Farms in Sioux Falls, S.D., has been closed since April 10. That’s the pig producers’ co-op Lockhorst belongs to and it typcially takes anywhere from two to five loads of 165 pigs each, per week. For a plant that normally kills around 20,000 pigs per day, those 800 pigs are just a drop in the bucket. But for the farmers who raised them, they’re a fast-growing concern with no good end in sight.
Without processing capacity, farmers are looking for alternative outlets for thousands of hogs.
Raising pigs is an efficient, precise system, said Glen Muller, executive director of the South Dakota Pork Producers Council. “That’s why we’ve been able to supply a relatively inexpensive protein source. We’ve maintained our production lines where every pig that is born has to have a space, so it has to be marketed accordingly to make that space available.”
The latest report is that eight pig packing plants have closed, leaving pig producers with more than 1.5 million pigs — a number that increases daily — and nowhere to go with them.
Brian Mehlhaf, from Parkston, S.D., has three 2,400-head finishing barns. He custom feeds for Terry Sjuts, from Nebraska, which means Mehlhaf and his family provide the land, buildings and labor, and Sjuts takes care of the rest. Mehlhaf’s wife, Corene, takes care of the pigs, his son Devin, does the mechanic work and takes care of the cattle they feed and Brian hauls the hogs whenever and wherever they need to go, including about 350-400 a week to the Tyson plant in Madison, Neb.
That plant was open until April 30, but Mehlhaf hadn’t been able to market those pigs for a couple weeks. As plants closed in Iowa and South Dakota, those packers started sending customers to the Madison plant. And once it was discovered that there were a few cases of COVID-19 in the Madison plant, workers stopped showing up, dropping the processing capacity from 10,000 to 3,000 a day.
“It’s hard to blame the people who stayed home because in a plant like that there are a lot of people in close quarters,” Brian Mehlhaf said. “I feel sorry for them. From what I heard they were going to ask all the employees to come in and test everyone for COVID-19.”
Once Mehlhafs knew every conventional avenue for getting their pigs butchered was closed, Corene suggested they post their pigs for sale on Facebook. “Pigs for sale. 300-pound pigs for $90 apiece. You come and pick them up.” Brian posted the ad on about 12 different ag-related groups at 9 p.m. “My phone was beeping with texts until 1:30 a.m. and started at 5 a.m.,” he said. “By 8 a.m. Facebook had pulled my ad because you’re not supposed to sell livestock. But, by the Lord’s blessing, it had been shared over 10,000 times by 8 a.m. I had over 500 calls that Thursday.”
As of April 30, they’d sold between 3,000 and 3,500, with pigs going as far as Maryland, Georgia, New York and Washington. He figured nearly 1,000 head had gone to Wyoming alone.
“The first 1,000 that came out of our barn were all picked up in pickups and trailers. One guy came all the way from Fargo, he had a lawnmower trailer he’d put wood pallets on the sides to hold the pigs in. The Lord has blessed us, greatly.”
But while Mehlhaf is encouraged by the public’s response to the hog farmers’ situation, he acknowledges it’s not a realistic, large-scale solution. Mehlhaf estimates about 120,000 head per day aren’t being killed. And the prices they’re getting — if they’re getting paid at all — don’t come close to covering the costs. “The breakeven is about $140 on those pigs selling for $90. It just happened to be about what the market price would have been that day. We were getting about $93-$95 at that time. We figured we didn’t have the expense of trucking on the ones they picked up.”
Pig farmers had already been selling at a loss, thanks to trade disruptions. But the announcement of resumption of pork exports to China, in the wake of the African Swine Fever that killed a quarter of the pigs in the world, and hit China especially hard, had producers breathing a little easier and ramping up production. Until one of the biggest links in the chain broke.
President Trump used the Defense Production Act to order plants to reopen, but in an industry where social distancing isn’t an option, thousands have tested positive for COVID-19, and 20 people have died, getting workers back to work isn’t a matter of just unlocking the doors.
April 29, JBS USA announced they would be reopening the pork processing plant in Worthington, Minn. It will be staffed by 10 to 20 employees — down from 2,000 at peak production — whose only job is to humanely euthanize pigs. They estimate they’ll be able to euthanize about 13,000 pigs per day, which will be rendered, sent to landfills, composted or buried.
“None of us want to euthanize hogs, but our producers are facing a terrible, unprecedented situation,” said Bob Krebs, president of JBS USA Pork, in a press release. “We will do everything in our power to work with the state of Minnesota to responsibly reopen our facility as soon as possible in support of producers who desperately require a more viable option for their hogs.”
With no concrete date for reopening plants for processing meat, and no idea of what capacity those plants will have once they do reopen, producers are trying to put off the decisions no one thought they’d ever have to make.
Lockhorst said the hogs he custom feeds aren’t quite ready to market yet, which is a blessing. They’re about 185-220 pounds right now, so he’s started limit-feeding them to buy some time so they don’t hit this bottleneck. “Normally the hogs would be on full feed, shooting for the highest gain and highest conversion we could get, to be the most efficient producers we could be. At this point we’re trying to drag our product out into a timeframe it can be utilized, so it’s a commodity again instead of a liability.”
This latest crisis comes on the heels of two years of weather challenges — last year Lockhorst got about half their corn in the ground because the spring was so late and wet. The corn they were able to harvest was poor quality.
Lockhorst also feeds cattle, and hasn’t been able to get a bid on his fat cattle. “Nobody will take them. How do I make this happen? How do I make this come together?” he said.
His family runs a small flock of sheep and he said those are probably the most profitable things on the farm right now.
Lockhorst owns some pigs through a 40,000-head co-op, which allows the partners in that co-op to market throughout the year, rather than just two times, spreading out their risk and giving them more buying and selling power. That co-op has shipped pigs across two or three states, just to find shackle space to get them butchered. “But the shipping to go that far eats up a lot of the value of a hog when they aren’t worth any more than they are,” he said.
But it’s not the value of the pigs these producers are concerned with. It’s not their position with the bank, or how they’re going to pay their power bill this month. That will come later.
It’s the more immediate question of what to do with these pigs that weighs so heavily on them.
Gregory Haak works at a Case IH dealership in Madison, S.D. He has a 3,300-head confinement setup, where they custom-feed pigs for a Hutterite colony, plus raise cattle and farm corn and soybeans. His goal out of college was to have a job in town for a while and slowly work into farming. “I’m six years out of college with no end in sight for getting into farming full-time,” Haak said.
“This was just another wrench in the gears, ruining the industry. We’ve had quite a few people come in and buy a small trailerload. It takes a lot of trailerloads to get rid of 3,300 head.
“We’re talking it day by day, talking to the guys we feed for. A week would be pushing it before we have to start euthanizing.”
That’s the reality no wants to think about, the word these farmers stumble over.
The government-approved word is “depopulation,” but for the people who are in these barns every day, who have committed their lives to caring for these pigs and producing a safe product as humanely and efficiently as possible, it’s a less-sterile concept.
And no one is talking about it. There are reports that some producers have already begun depopulating their hog barns.
An image on social media shows a pile of dead pigs with the caption, “There are 1,000 pigs in that pile.”
One report from a hardware store in Hull, Iowa, is that a lady walked in and bought 8,000 .22 shells. The clerk said, “It’s not my business, but that’s a lot of shells.” She responded, “We have 7,500 fat hogs with no prospect of moving them.”
But when asked if they’d be willing to talk about it, the response is invariably, “They just want to put it behind them.”
It is a “have to” situation. As long as the hogs are eating, they’ll gain weight, although how much and how fast they gain can be controlled somewhat. The additional weight, under normal circumstances, is a concern because the meat quality degrades when they get over 320 pounds, so they get docked pretty severely when they go to slaughter. But the bigger concern today is that their skeletons can’t hold up to much more weight. Also, the barns, many of which are built over the sewage storage, are designed to hold a certain amount of weight, and when every pound a pig gains is equal to more than a ton for the whole barn full of pigs, it adds up quickly.
And the circle of life hasn’t stopped. The pigs that are being butchered now were planned 10 months ago. So the pigs that are being born now will have to be moved in a few weeks, and the ones that are ready to go on feed have to go somewhere. Today’s baby pigs were planned to fill a gap nearly a year from now, but no one knows what any segment of the industry will look like next week.
“Everybody is just waiting for good news that another plant is going to open, or fears that another one will shut and we’ll get swamped even worse,” Lockhorst said. “Nobody has a clue if it will get better or worse. The toughest is not knowing if we’re even to the bottom. The unknown is the hardest to deal with.”
Lockhorst’s wife, Robin, is a pharmacist in the cancer institute at Avera McKennan hospital in Sioux Falls, so they’re aware of the health issues facing the population in general, and have the added stress of providing “essential” services at a time when many people can just stay home.
Who is considered “essential” and what that means for the rest of the country is one of Lockhorst’s frustrations. “We sit here, not being able to get rid of these hogs. We’re looking at unemployment that hasn’t been seen since the Great Depression. Part of the reason we can’t get rid of these hogs is because people aren’t showing up because of fear, but it puts the rest of us in fear for our livelihoods. You begin to wonder what’s selfish, or true fear, or why can’t some of the people work, who are willing to work? Why can’t they do some of these jobs? Why does the government get to say you can’t run some of these plants? The people that are supposed to be able to run these plants, and show up to work, are going to expect food on their table. Do these people forget they are part of the process that has to happen to provide it to everybody? We have to do our jobs every day. We signed up for that. But you have to ask, why doesn’t everybody else do their part?”
The mention of the Great Depression brings up the pictures in history books of piles of dead cattle and hogs — six million hogs in the late spring of 1933 — killed and shoved into holes, paid for by the government. Those payments gave farmers enough to get by another year, or to start over somewhere else. No one thought that would be a reality again.
So far, the only government assistance for hog producers is with depopulation costs, through the NRCS Environmental Quality Incentives Program.
The NRCS wouldn’t confirm that producers were euthanizing pigs, but directed us to their website, which has a section called “animal mortality.” It lists the payments available to producers who have to dispose of their hogs, which varies by disposal method.
The website says, “Through the Emergency Animal Mortality Management practice, NRCS helps producers plan and cover part of the cost for disposing of livestock because of an emergency animal mortality event.” The accompanying fact sheet is dated April 2020.
Lockhorst signed up for this job because he loves it. “I love the livestock, love the animals. It’s making it tough to remember why you do what you do, some days.” He said he could talk for hours about these amazing “factories” that pigs are — turning corn and beans into meat, while providing fertilizer for the corn they eat. That’s part of what makes the prospect of euthanizing healthy animals so difficult.
But he still loves it and doesn’t know what else he would do. “It’s always worth it when your kid is with you and happy, holding a pig or a lamb or playing with a calf.“
Lockorst is hoping their kids, Mason, 5 and Sutton, 2, have the opportunity to carry on a family legacy in livestock. “They are there for every second we will allow. Mason spent the last few days in the planter with me. They’re all about calving and lambing and doing chores of all sorts, all the way through.
“Today, after hearing us talk about what’s going on, Mason goes, ‘Why don’t they want our pigs.’ I said, ‘It’s not that they don’t want them, buddy…’ How do you explain that to a 5-year-old?” ❖
Agriculture Secretary Tom Vilsack will travel to Colorado on Tuesday and Wednesday for events with Democratic Sens. Michael Bennett and John Hickenlooper of Colorado and Gov. Jared Polis, also a Democrat.
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