I was just chatting with legendary pork market and pork industry analyst Glenn Grimes here at the World Pork Expo in Des Moines, Iowa. It’s a beautiful, blue sky day, and there was rain two days ago, so there are lots of producers here milling about this giant hog industry event.
But Grimes was pretty glum about the state of the hog industry. “In all my 58 years I’ve never seen it so bad,” he said to me. That includes the 1998 collapse, which he noted only lasted a few months – with a few weeks being the truly terrible time. This downturn has been about two years for American producers, and “21 months eats up a lot of equity for a lot of people.”
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What’s needed? Lots fewer hog producer still. The sooner that happens, Grimes said, the quicker everyone else – the survivors – can recover and begin thinking of the future again. But that’ll require people to go out of business, and no one wants to do that. Everyone wants to be one of the survivors, not one of the victims.
So involuntary retirements from the industry may be the main way that the industry reduces capacity, and that’s not going to be a lot of fun, and it’ll take some time.
Here’s some more grim news from a guy I just spoke to: Nick Giordano, the trade expert with the American NPPC. They’ve taken note of the Canadian hog producers request for aid from Ottawa, and if it’s granted some sort of trade action will be demanded. “We’re already getting calls from our members about this,” he said to me.
So it’s beautiful here, but not happy.
