When the door opens, the younger hogs in Brian Brandt's 1,200-head confinement barn start prancing around their pens as if they're ready to take on the horses at the next Kentucky Derby.
PLYMOUTH - When the door opens, the younger hogs in Brian Brandt's 1,200-head confinement barn start prancing around their pens as if they're ready to take on the horses at the next Kentucky Derby.
Their highly refined bloodlines, carefully blended rations, and climate-controlled quarters give them a lot of energy.
It's a marked contrast to the energy-sapping circumstances confronting their owner. Together, those are enough to make pork people want to curl up in a corner.
A few miles south of Plymouth and 60 miles southwest of Lincoln, you'd never get that sense from looking at corn and soybeans blessed by recent rain and warmer temperatures. But the early indications of harvest prosperity don't extend to the livestock sector.
Almost without exception, those who depend on beef, pork and milk for big portions of their incomes are suffering.
Amid the rumbling thunder and flickering lightning of a mid-afternoon storm, Brandt sits at his dining room table and ponders poisonous economics from the pork side.
In a calm voice, he talks about the trouble that started to take shape for him and other veterans of the hog business in 2007.
Trouble began with bulging pork supplies. It compounded with rising grain prices, national recession and then world-wide recession. The final indignity was the swine flu scare in April that had nothing to do with eating swine meat.
Brandt's losses ranged as high as $45 per market hog last year. He was almost back to break even before swine flu. Now his losses are back to $25-30 per market hog. And he sees no end in sight.
"I've been through some big crashes," he said, pointing toward other periods of adversity in the 1990s, "and I've never seen anything like this."
Typical grain and livestock producers in Nebraska don't talk about the dollar impact on them personally. Count Brandt, who has both a Nebraska operation and a partnership stake in Kansas, as an exception to that rule.
He estimated his loss in Nebraska over the last 18 months at $1.2 million.
"Our Kansas farm lost $2.2 million last year. We would have lost $1.5 million more if we had not totally liquidated."
Empty hog barns are being refilled now, but it's not because the partners have found a solution to red ink.
"We had absolutely no sales for nine months and that was still $1.5 million cheaper than running (the operation)."
Even before a state that regularly ranks in the top ten in pork production hit its latest rough patch, the state's pork industry was in consolidation mode.
In 1992, according to the federal agricultural census, there were 10,826 hog farms in the state. That dropped to 2,213 by 2007.
Although he emphasizes that his expertise is in hog nutrition, not hog economics, Duane Reese of the University of Nebraska is very familiar with those numbers and with the higher feeding costs that are shrinking them further.
"If corn goes up a dime a bushel," Reese said, "then you've automatically added $1.19 to the cost of producing a pig."
It's the same story for soybean meal. "If the price of soybean meal goes up $10 a ton, you've added 72 cents to the cost of producing that pig."
Reese moves on from there to the usual hopes that are pinned on May, June and July as the time for a seasonal price rally. Typically, the pork supply is down and demand for grillable pork is up.
"Everybody was really looking forward to that this year," he said. "The end of April came about and H1-N1."
That's the more scientific name for what many others call swine flu.
"That really curtailed the export demand for pork," Reese added, "particularly to Mexico."
For what it all means economically, he points to Iowa State University's John D. Lawrence and his electronically viewable chart of the financial returns for finishing hogs.
Lawrence's most recent numbers show an average loss in Iowa of $18.50 per market hog for May.
Back at Plymouth, pork producer Brandt said he's not going to ride downward trends all the way to his own financial ruin. He has always depended mostly on cash to cover his costs.
"I have to make a decision that, when I stop, I can pay my last bill. But I compete with companies that don't necessarily play by those rules."
In the lush days of June, he has a message for people who don't understand the fallout from livestock losses.
"Nothing in this state - nothing in this state - comes close to what livestock puts into the economy."
Reach Art Hovey at 473-7223 or at ahovey@journalstar.com
Posted in Local on Monday, June 22, 2009 12:00 am
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