Pork farmers in a panic as virus ruins 2020 hopes
DES MOINES, Iowa — After enduring extended trade disputes and worker shortages, U.S. hog farmers were poised to finally hit it big this year with expectations of climbing prices amid soaring domestic and foreign demand.
Instead, restaurant closures due to the coronavirus have contributed to an estimated $5 billion in losses for the industry, and almost overnight millions of hogs stacking up on farms now have little value. Some farmers have resorted to killing piglets because plunging sales mean there is no room to hold additional animals in cramped conditions.
“One producer described it to me the other day as a snowball rolling downhill, and every additional disruption that we have just kind of adds to that and how fast and how big it’s going to be when it finally hits,” said Mike Paustian, who farms 2,400 acres of corn and soybeans and sells 28,000 pigs a year near the small eastern Iowa community of Walcott.
COVID-19, the disease caused by the coronavirus, has created problems for all meat producers, but pork farmers have been hit especially hard.
They entered this spring in shaky financial condition because tariffs had drastically reduced sales to China and Mexico. Many operations have struggled to get enough workers, in part due to federal immigration policies. Then demand plunged because the virus forced the closure of restaurants, hotels and other businesses that buy about 25% of pork, including nearly three-quarters of bacon produced in the U.S.
The biggest problem could be getting worse as additional giant slaughterhouses that can process more than 20,000 hogs a day have had to close at least temporarily as the virus spreads among workers. The industry slaughters from 10 million to 12 million pigs a month.
Whereas poultry producers can slow production by not hatching chicks and ranchers can keep cattle on pastures, pork farmers don’t have good options. Hogs are raised inside barns with limited space, and it takes time to stop the birthing cycle for pigs.
“We are in crisis and need immediate government intervention to sustain a farm sector essential to the nation’s food supply,” said Howard Roth, a pig farmer from Wauzeka, Wisconsin, and president of the National Pork Producers Council, an industry trade group.
The group has asked the federal government to buy $1 billion worth of pork in cold storage that had been destined for restaurants and give it to food banks, which have been besieged by people who have lost their jobs as much of the economy has shut down.
On Friday, the U.S. Department of Agriculture announced it would spend $3 billion to buy fresh produce, dairy and meat that will be sent to food banks. Roth said the purchase will hopefully help move a backed up supply of pork and help raise hog prices. The USDA also said it planned $1.6 billion in direct payments to pork farmers with limits of $250,000 per individual.
Roth said the aid was appreciated but wasn’t enough to meet their problems.