Pork producers are coming off a tough year due to COVID-19, but those attending the South Dakota Pork Congress were optimistic about 2021.
Craig Andersen, outgoing South Dakota Pork Producers Council president and Centerville, S.D., producer, said both producers and packers are healing after the industry collapsed starting in April. At that time meat processing facilities started to close due to COVID-19 related illnesses among workers in the plants.
“Slowly it's beginning to get better again. Things aren’t great yet but we’re going to be able to keep moving forward,” he said.
“That plant, it’s about 19,500 head a day, so you multiply that out that’s a lot of pigs that got backed up real fast,” Andersen said.
Most pork processors in the region and country have returned to nearly full capacity. Shane Odegaard, incoming SDPPC president and a Lake Preston, S.D., producer, was hit directly by the Smithfield closure. He has been amazed by how quickly the plants were able to return to normal slaughtering pace.
“They’re harvesting the pigs. In our current operation ourselves we’re current and able to get loads scheduled and delivered on time,” he said.
Producers forced to destroy or euthanize pigs are getting help from the latest COVID-19 relief bill and will be getting 80% of the value of those animals in an indemnity payment. The details will be worked out by the new Biden administration. Anderson said it is welcome assistance.
“We have been struggling for the last 10 months, 11 months and we’re trying to keep as many producers out here as what we possibly can," he said.
On Jan. 15, USDA announced the details of CFAP 3, which will include $17 per pig for producers that experienced COVID-19 related losses, and it will include contract growers. Farmers that received previous CFAP payments don’t need to sign up again because the payment will be made by the Farm Service Agency automatically.
Even though processing has returned to normal, the uncertainty surrounding COVID has slowed down expansion in the industry in the region and in South Dakota.
“Some of it has to do with the plant closure for that amount of time and getting things stabilized again,” Andersen said.
Clear Lake pork producer Adam Krause is a contract grower, so his risk when the market collapsed was less than others. However, he said for younger producers it was a bit of a wake-up call.
“We learned very quickly that market access is going to be a huge issue in the future, whether that be from COVID situations or from plant shutdowns for any other reasons,” he said.
Krause said that will mean some tougher conversations about future shackle space when producers make the decision about whether to get into the business or expand.
COVID-19 has also slowed down expansion in the pork sector due to higher building costs. Brad Hohn with MDS Manufacturing said building costs have increased about 40% due to the pandemic, and there are expectations of additional increases in the price of lumber and steel in the next few months. He said that has some producers holding off on new facilities.
Andersen said the silver lining of COVID-19 is some of the lessons that will help strengthen the industry in the future, including how they handle foreign animal diseases like African Swine Fever.
“We learned about the necessity for the traceability of following the disease flow. If you have a hot spot in one place, you’re going to have to be able to follow it and know where it is so that you have an opportunity to contain it,” he said.
He said there are a million hogs on the road to market every day and so this will be critical if there is an outbreak.