16
JUNE 20, 2012
Nebraska Farm Bureau News
Ask a Nebraska Farmer This series is all about answering your questions! Post your question to our blog, http://nefb.wordpress.com and see which Farm Bureau leader answers your question.
Q
Here is my question/ idea - what if you had to downsize your hog numbers instead of rebuilding, which would be costly - would the proposed requirements for sow housing actually allow for more farmers to enter the industry? Wouldn’t that be a good thing?
A
There used to be a lot more hog producers around before large hog farmers/contract hogs - don’t you think the ag system would find a way to correct itself? ~ Eric
Thanks for the great question, Eric. I think the hog business and those who are forwarding these new proposals needs to grapple with this question that you raise: Will this new proposal change the ownership landscape of hog farming and will it help bring new people into the business? First, one must answer the question of what currently affects farmers’ decisions about entering the hog business. From my vantage point, there first has to be an opportunity. Is there a hog farm for sale or land available to build a barn with neighbors and zoning that will allow you to build? Second, there has to be potential for profit. I have been raising hogs for 20 years and in the last several years, even with paid-for facilities, there have been some gut-wrenching losses that I wouldn’t wish on anyone. Third, just like any business that is trying to attract new investors into the marketplace, there needs to be a period of stability and risk levels that are tolerable. So to answer your question from my perspective, it is unlikely that these new proposals will attract new people into hog farming for several reasons. Farms that will most likely be for sale will need to be modified at a high cost due to the new proposals. Also, I do not see zoning restrictions being relaxed because of these proposals, nor do I feel a new facility built to comply with new open sow housing will be any more welcomed to a neighborhood than they are currently. I have been watching closely and have not heard of a single corporate group offering more money for hogs raised under their new proposals. So history would suggest that because we as farmers do not set our own prices, we will have to absorb the cost. After some producers exit the business because of various inabilities to retrofit their facilities, the industry will produce less pork, prices will rise in the grocery stores, and eventually profit will return for a time. Because of this cycle and the uncertainty that these proposals will create, I don’t see the banking sector very willing to loan money to new people wanting to enter the hog business. In my opinion these new proposals will have the opposite effect! Hog farms will continue to grow in size (both by animal units and building size) in order to compete. Smaller family farms like mine may exit the business if the cost becomes too great and the reward is too little to stay in business. These new proposals, if adopted, will change the landscape of the hog business, but as U.S. farmers, we will find a way to adapt and continue to be the best at growing food for our growing world.
Mark McHargue
Nebraska Farm Bureau’s first vice president from Merrick County
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