I can’t tell you how many times I have been asked this question over the past 12 months. In 2007, the industry had strong profits and strong balance sheets. That was a long time ago.
The bottom line is this – if demand remains sluggish, it could take until 2011 for the pork industry to be consistently profitable again. We will eventually get supply down, but it will take a while longer for this to occur.
In our last severe downturn (1998-99), a good portion of the industry could exit the business and turn back to crop farming. Some actually became a contract grower for someone else. The current issue is the swine industry has become more specialized. The top 30 producers represent almost 70% of the industry. Pork production is their livelihood. If they decide to get out of the business, it’s likely they do not have another option to turn to. This is why it’s taking so long for the industry to contract. The swine industry is very good at producing 115 million pigs. However, with current demand, we only need 105-107 million pigs – a reduction of 5-7%. We will get there, but unfortunately it will be a slow and painful process.
A Challenge to All Pork Producers – I have spoken to several groups this past year and every time I have urged people to become an advocate for the industry. I believe this is our biggest Achilles heel. We are great at production, but we need to do a much better job of “rebranding” our industry. We need to take steps to make the industry better – not only from a profitability standpoint – but also from a public perception standpoint. We can no longer set back and just raise pork. Here is my challenge for each of you:
• Communicate with your congressmen and senators regarding the pork industry. Educate them on how our pork is raised and help them understand the current economic crisis we are facing.
• Communicate with your state and local elected officials regarding the pork industry. Address how many jobs the pork industry provides, the tax dollars we pay, and the economic impact we make to local rural economies. We recently met with our state officials and they had no idea the swine industry was hurting financially.
• Finally, help officials understand the economic impact your hog operation has on your local communities and your neighbors. Emphasize our priorities of raising animals in a humane way and let them know that pork is a safe and nutritious product. Perhaps you are reading this and thinking, “I have bigger issues that I am facing at home and I don’t have time to address these other issues.” I completely understand that. However, since very few people understand our industry, all of us must work on educating people, everyday, about all of the positive things the swine industry provides. Others have misrepresented our story for too long – and it’s time to stand up and set the record straight. We must all be an advocate of our industry, not just producers of pork. The National Pork Board and the National Pork Producers Council can only do so much, so I urge all of you to start telling our story. Our future success depends on it!
Mark Greenwood
Swine Industry Consultant
Contact Greenwood at mgreenw@agstar.com.
