Positive for pork
After some tough years of low hog prices and soaring feed costs, profitability has returned to pork production. That’s good news not only for hog producers, but for all of Iowa agriculture, as well as the state’s economy. Iowa is the leading hog-producing state, with about 30% of the nation’s hog production, up from 25% a few years ago. Hogs eat corn and soybean meal, boosting demand for those crops, as well as provide jobs and other economic activity.
“This past year was good for hog producers, and 2012 promises to be profitable, too,” says Leon Sheets, who served as president of the Iowa Pork Producers Association in 2011. Sheets, who farms and raises hogs with his family near Ionia in northeast Iowa, passed the gavel to his successor, Bill Tentinger, last month at the 2012 Iowa Pork Congress in Des Moines. Tentinger farms and raises hogs with his family at Le Mars in northwest Iowa.
• Iowa’s pork industry is an important engine helping drive the state’s economy.
• Iowa is the No. 1 pork-producing state in the U.S. and the top state for exports.
• Profits have returned to the hog business, which is good news for all of Iowa
“The price received for our product is edging toward all-time highs,” says Sheets. “It’s still under the record of last summer, but it has the possibility of reaching that high again. Consumer demand for pork is up — so is export market demand. Our input cost, particularly feed cost, has eased a little. Hog producers have to stay very vigilant on input costs.” Tentinger, who farms in an area of Iowa with the driest reserve subsoil moisture, adds, “We need rain and a big corn crop in 2012.”
Foreign markets strong
Pork exports to foreign markets are a key reason why hog prices are strong, with about 25% of Iowa’s pork production being shipped overseas. “Pork producers have worked hard at building overseas markets over the years, through programs funded by checkoff dollars,” says Tentinger.
Iowa exported more than $1.1 billion of pork last year, and produced in excess of $5 billion worth of pork in the state. Iowa produces twice as much pork as Japan, and has almost three times as many hogs as South Korea. Iowa has about 3 million people; South Korea has 50 million people. “There’s good reason why we export a lot of pork to these other countries,” says Tentinger. “There’s still more potential.”
More than 39,000 jobs are directly related to raising and caring for hogs in Iowa. Iowa pork production alone contributes $5 billion annually to the Iowa economy. Several billion dollars are generated in the state each year from pork processing. “We have quite an impact on the state of Iowa,” sums up Sheets.
Looking to the future, Sheets says producers “need to make sure we keep doing the right things for our customers, to convey to them that we have a safe, healthy, wholesome and nutritious product. We want to continue to earn their business and their trust. On the cost side of producing pork, we need to remember hogs are a great market for the crops we grow in Iowa; hogs add value to corn and soybeans. We need a balance between hog prices and feed costs.”
The industry faces challenges, including the need to solve the porcine reproductive and respiratory syndrome, or PRRS virus, a swine health problem that eats into profits. Anti-meat groups and environmental attacks are other issues the industry must continue to address. “We need to be good neighbors, do things right on the farm, and build consumer confidence in our product,” says Sheets.
Keeping youth engaged
Another item is the importance of bringing in the younger generation and getting them involved. “For our industry to survive, we need to continue to encourage our younger people to stay in rural Iowa, be involved in the hog business and help them make a good career out of it,” says Tentinger. “We need to encourage our young people to be active in their commodity and farm organizations. Our youth are our future.”
This article published in the February, 2012 edition of WALLACES FARMER.