A couple of hog farmers near John Vossberg’s farm are planning to build new barns.
This is now an unusual development in Iowa, the state upon which Manitoba hog producers rely on for sales.
“I don’t know why they’re doing it,” said Vossberg, an Iowa Pork Producers Association vice-president.
It’s not that Vossberg doesn’t believe in the hog industry, but right now the economics of hog production make little sense compared to farmers’ other options.
“If you’re 52 or 54 years old and you can make money off of ethanol and $4 corn, why work so hard and raise hogs at a loss?” Vossberg said in an interview during the Manitoba Pork Council annual meeting.
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“Our industry is going to change here.”
Iowa has been the heart of the U.S. hog industry since before the Second World War. Every year for decades Iowa has produced around 15 million hogs.
It buys millions of Manitoba-born weanling pigs to fill its feeder barns. Although many prairie farmers hoped that the end of the Crow Benefit subsidy would give the eastern Prairies the cheapest feed grain prices in North America, U.S. production subsidies left Iowa with the lowest feed prices. Feeder barn development sped ahead in the state and Manitoba producers focused on weanling production, which required more management but had cheaper feed costs.
But the development of the ethanol production industry in Iowa may change all those economic factors. Already feed grain costs in parts of Iowa have become more expensive than in other competing states, and as dozens of new ethanol plants start buying corn, the state will probably become a corn importer.
Vossberg said hog production may go from being a central part of almost every corn-soybean farmer’s operation to a sideline or even discontinued.
“The cost of our corn is just skyrocketing,” said Vossberg.
“If the marketplace doesn’t help come up with that, it’s going to be a lot of red ink for a lot of people. If this hog industry turns to the red, we feel our industry is going to contract.”
The farmers near Vossberg’s farm who are planning to build new barns hope the manure value of hog production will make up for the expense of corn.
But southwestern Iowa producer Bryan Karwal said there needs to be a margin between the meat price and the corn price.
“You still have to make money on the hogs,” said Karwal.
