Raleigh, NC - With hog prices at their lowest levels in almost 3 decades, pork producers in North Carolina and across the nation continue to face a crisis situation with no quick fix in sight. According to the North Carolina Pork Council, prices for live hogs this week in the 16 1/2 cents per pound range means that producers are losing $57 - $58 dollars per head on every hog that they market. In North Carolina alone, producers are losing approximately $15.9 million dollars per week and compared to one year ago, their gross income is down by some $19.2 million dollars per week. Prices move up and down all the time but it has been 27 years since hog prices have hit these low levels.
What is causing hog prices to be so low? It's quite simple, even though domestic and export demand is good, there are more hogs coming to market each day than there is processing space available. All across the nation, pork producers expanded ahead of schedule due to public policy discussions and decisions on moratoriums and additional rules and regulations. Four or five year's worth of orderly expansion has been squeezed into 12 to 18 months. The feeling among farmers was, if we don't do it now, we won't ever be able to do it. This expansion coupled with a loss of 35,000 head per day processing space due to Midwest plant closings and restrictions by the state DENR on the Carolina Foods processing plant in Bladen County is causing a real backlog of hogs coming to market. Packers can offer lower prices and still get more hogs delivered than they have space to process.
The long-term solution is for farmers to reduce production. In the crisis situation that exists today, farmers need help immediately and that help would come from an immediate increase in processing space. The only processing plant in the U.S. that is not allowed to run to full capacity is the Carolina Foods plant here in North Carolina.
At these prices, it is just a matter of time before hundreds of farmers start to go out of business. The pork situation, coupled with another large cut back in tobacco allotments, depressed prices for corn, soybeans and cotton will have a dramatic impact on North Carolina's economy. Without profits from hogs, tobacco, corn, cotton and soybeans, family farms will be lost, thousands of farm workers will be laid off and a large number of businesses that depend on North Carolina farmers for a portion of their income will find it extremely hard to survive. Agricultural roots run deep in North Carolina. Thousands of businesses from auto & truck dealers to farm equipment dealers, from insurance agencies to building material dealers, from banks to feed and fertilizer companies are dependant on North Carolina agriculture. When the agricultural economy in North Carolina suffers, the whole state suffers.
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
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