Battling Through Tough Times

Farmers that raise animals for food are going through a pretty tough time right now.  Corn and soybeans are the staples of our food animal diets.  It’s been said that the Midwest section of the U.S. is the bread basket of the world and there is good reason to believe that is true. 

But whether it is domestic demand, international demand, increased ethanol demand or whatever the reason, the fact is that there is not enough of these grains to go around and that has caused the price to sky rocket.  Seventy or more percent of the cost of raising a pig to sell at the market is feed cost.  When the price of the basics of that feed – corn and soybeans – goes up 300+%, the cost of producing a pig goes up by at least that much too.

Pork producers have to feed their animals.  It’s humane and the right thing to do. So, right now and for the foreseeable future, the very high price of grain means that most pork producers have to sell their animals at prices that ensure that they will lose money.  They have to sell at a price that won’t cover the cost of feed that they have to use.  The difference is as much at $40 to $50 even $60 per animal!  Every pig that goes to market is costing that much more to raise than the market is paying.  In just about any other business, if it costs you to make something for $50 more than you could get when you sell it, you wouldn’t do it any longer.

That’s our challenge right now.  If economics works (and it does), when pork producers leave the business because of these losses, eventually the supply is going to go down and when demand is pretty much the same because people like to eat pork the cost has to go up. 

It’s in everybody’s interest to buy pork now.  It puts pork in your freezer at a reasonable price and it helps to keep farmers that raise pigs in business while this whole feed issue gets sorted out.

- Dr. Paul Sundberg