I’m in hog heaven in Iowa today. Actually, I’m surrounded by pigs which will soon be in hog heaven—literally.
These are not fat times in the pig biz. After three years of profitability, pig producers this year have been spending as much as $50 more to raise a pig than they can sell it for. There are just too many pigs. Part of that is due to the surprising success of a vaccine improving survivability. Part of it is due to producers overproducing, expecting the good times to continue and never guessing that feed and fuel costs would double.
This is all good for you, the consumer. Pork prices should stay relatively cheap for the rest of the year until they work through the supply glut—then expect them to rise. Smithfield Foodsreported a 94 percent plunge in profits this week and plans to slaughter as many as 50,000 producing sows to downsize its herd.
The bright spot is overseas. Pork is the most eaten meat in the world. The Chinese especially love it, and exports there are up 500 percent. The weak dollar makes US pork a bargain, to the dismay of the Canadians, where the government is now paying farmers to kill 150,000 sows.
I’m reporting all of this on CNBC today.
Notes on what you won’t see on TV.
--Dhamu Thamodaran, the head of risk management for pork giant Smithfield Foods, is a native of New Delhi who grew up a vegetarian (he's Hindu). He’s not anymore. That's what getting a Ph.D. at Iowa State will do to you.
--The Israelis are here with a pork product. I kid you not. They’re selling a semen analyzer which can tell you in 45 seconds your boar’s sperm count. The product was originally sold as a diagnostic tool for human fertility treatments, but they are branching out to pigs.
--My favorite new product—“The Eliminator.” It incinerates carcass leftovers using less energy. Green death!
--I interviewed Zachery Brazel, the most mature 7-year-old I have ever met. All business. Been raising pigs for three years. Cell phone to his ear most of the day. They don’t grow them like that in California. (He's in one of my stories.)
--Most interesting observation:
Needless to say, there aren’t many ethanol fans here, not even among the pig producers who also grow corn (though they find that a nice hedge). But when I asked one producer the greatest challenge he faces, he mentioned animal rights activists. In his mind, they mean well, they just don’t know what they’re talking about.
According to him, many activists are pushing to have sows kept in pens with other sows instead of living their lives alone in a stall. Sounds a lot more humane, doesn’t it? Well, according to the producer, sows "are like teenage girls in high school...mean." Throw them together after they’ve been weaned off their young and they'll start biting each other "where they shouldn't," injuring each other in an area necessary for breeding.
Some activists have suggested keeping sixty pigs to a pen. "I guarantee you if that happens," he says, "five of them are going to get the crap beat out of them." Others are pushing to let hogs roam outdoors instead of being kept inside. That’s fine in June. But in February, "If that's humane, then I'm gonna sell all my hogs."