Minnesota pork industry hit hard by swine flu fearsST. PAUL – “Swine flu” made an already-sick pork industry even sicker. And while the rest of the world awaits a new, and potentially much harsher, round of what officially is known as H1N1 influenza this fall, pork producers fear that renewed talk of the flu will make a money-losing situation worse.
By: Don Davis, Forum News Service, INFORUM
ST. PAUL – “Swine flu” made an already-sick pork industry even sicker.
And while the rest of the world awaits a new, and potentially much harsher, round of what officially is known as H1N1 influenza this fall, pork producers fear that renewed talk of the flu will make a money-losing situation worse.
Ill-founded concerns that people could catch the flu by eating pork, combined with the recession, high crop prices and international trade issues to threaten hundreds of Minnesota pork industry jobs.
Brian Buhr, head of the University of Minnesota’s Applied Economics Department, offered a glum assessment of the pork producers’ situation: “They are in as bad a trouble as they have been in.”
Hog farmers today lose more than $30 on each animal they sell.
Pork production is a big Minnesota economic engine.
The state trails only Iowa in hog production, selling more than 15 million hogs annually.
Economists and pork experts agree that many pork producers will leave the business, either voluntarily or because they no longer can get loans to keep their operations going.
Just before news of the “swine flu” spread in April, pork producers were optimistic that the then-nearly $20-per-hog loss they were taking was a thing of the past. But even though scientists were frequently quoted as saying that eating pork could not give someone the flu, the industry took a deeper hit as consumer demand fell and some countries banned American pork amid flu fears.
David Preisler, Minnesota Pork Producers Association executive director, said the H1N1 hit for Minnesota producers will be $130 million through October, with more to come if the flu accelerates again. Even if the term “swine flu” is not used this time, a lot of sick Americans means less pork and other food will be purchased.
Pork exports dropped about 5 percent after the flu outbreak.
Problems did not start with the flu. Pork producers have lost money for 23 of the last 25 months.
The pork problem started with high feed costs. Corn and soybeans were expensive, fueled in part by demand for using the crops in biofuels such as ethanol.
Then came April and what most called the “swine flu.”
During that time, American shoppers have found bargains at the expense of Minnesota pork producers.
Buhr predicted low pork prices will last at least through the fall.
The state’s pork production could fall by up to 1 million hogs, the pork producers’ group says. If so, 300 farm jobs and 950 off-farm jobs will be lost.
To deal with lower global demand for pork, economists say the industry needs to cut production 5 percent.
Small farmers who raise hogs, crops and other commodities may be in a better position to survive than those who specialize in hogs, Buhr said, because they can drop or cut back hog production and continue to receive income from other farm operations.
Despite all the gloom and doom, Preisler offered a bit of optimism.
“We do need to remember that long term and big picture, there is no better place in the world to raise hogs than right here. We have a fantastic infrastructure, we produce the feed right here and we have plenty of land to spread the manure (as fertilizer).”
Davis works for Forum Communications Co., which owns The Forum. He can be reached at (651) 290-0707 or firstname.lastname@example.org