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special report
Drought 2012: Hog producers still hoping for a better bottom line
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any pork producers spent last summer and fall worrying about how much their feed was going to cost – and with good reason. But in southwestern Indiana, the epicenter of the drought, it was a different story. “You didn’t know what was going to be available,” explained Bill Tempel of Tempel Genetics, a seed stock and commercial hog operation in Spencer County. “The fear is, you go to make feed and the bins are empty.” “People were really scared about what was going to happen and if there was going to be enough corn,” added Valerie Duttlinger, Bill’s daughter and the operation’s genetics coordinator. A conversation during a statewide livestock meeting in August encapsulated the issue for her.
“Somebody said, ‘We’re just concerned about how much we’re going to have to pay for corn,’ and I said, ‘Well, that may be your concern, but our concern right now is where is the corn going to come from?’” she related. Tempel Genetics produces both commercial hogs and genetics (seed stock and semen) near Gentryville. The 1,100-sow operation merchandizes to producers locally, in other states and even in China and Japan. They also raise about 1,000 acres of grain for feed. But last summer and fall was spent scrambling for feed. As the drought intensified and the corn crop deteriorated (some fields had yields as low as 2 bushels/ acre), it became clear that they might have only about 60 days’ supply of feed by the completion of harvest, Tempel said.
Besides being independent pork producers, the Tempels also sell purebred seed stock and semen. Their customers range from producers in nearby towns to producers in China.
Tempel Genetics reduced its sow herd from 1,400 to 1,100 head as part of its strategy to make it through last year’s devastating drought.
April 29, 2013
Bill Tempel and his family managed to come out smiling despite last year’s devastating drought. The yields on their worst-producing fields ranged from 2 bushels/acre to 10 bushels/acre. From left are Bill and Angie Tempel, their daughter Valerie Duttlinger and her husband Ben.
They let farmers in the area know they were in the market to buy corn. Because some sellers didn’t want to sell right at harvest, they bought a lot of old-crop corn. A big problem was that farmers they were buying from didn’t know how much they’d have to sell. “We got their commitment…but we’d have no idea how much they were going to bring,” Duttlinger said. “There was a period of about two months there that it was hard to know really what we had our hands on.” They also found themselves in competition with ethanol plants. “From the livestock perspective, when corn supplies or carryouts are under a certain amount, ethanol usage needs to be relaxed,” Tempel said. “Whenever we had corn offered, we felt like we needed to buy it because we weren’t really sure what was out here in the country,” he explained. “So we’re in pretty good shape now. We’re probably within 10,000 bushels of having enough” to carry them through harvest. But the cost was high: Since August, they’ve paid an average of $7.82/bushel for corn. This compares to a high of $5.50 during the drought of 1988. Tempel said the farm used several tactics to get through the drought: 1. Dispersing the sow herd
on one farm, which cut production by 20 percent, and selling 1,600 weaned pigs so they wouldn’t have to buy corn to feed them. 2. Planting a third of their acres to wheat, which helped use up the nitrogen left in the soil by poor corn yields and will also provide another source of feed if they run low on corn this summer.
3. Working with a grain merchandizer to connect with sellers. 4. Testing corn frequently for the presence of toxins while feeding a toxin inhibitor. They aren’t planning to return to their pre-drought production as yet, Tempel added. “Not unless the economics get better,” he said.
Livestock farmers continue to long-term effects A lot of people have been asking ag economist Chris Hurt of Purdue what kind of year livestock farmers can expect in 2013. The next 100 days will determine the answer, he said. “There’s a lot of optimism,” he said. “One hundred days from now we’re going to know a whole lot more about feed supplies, but today…it’s just not assured. It looks good in the Eastern Cornbelt, we’ve got more water here, but Western Cornbelt, Great Plains – still a lot of drought. We’ve got a long ways to go. “That takes rain – that’s what we’ve got to see,”
he said, adding, “We’re going to know a lot more 100 days from now.” The drought took an enormous toll on the livestock industry, Hurt said. particularly beef cattle. Beef cow numbers in the U.S. are at their lowest level since 1962, and the number of all cattle and calves is the lowest since 1952. Last year alone, beef cow numbers dropped by 3 percent, mostly due to the drought but also because of very high feed prices. Hog producers also had a very difficult year, but Hurt said the overall size of the breeding herd decreased by only 1 percent, which is less than analysts were expecting. “Beef really took the brunt
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