US sow farmers scale back after bad year

In the last year, the number of sows dropped by 61,475 to a level 4.19 million animals during the most recent inventory, according to the Pork Powerhouses list compiled by US agricultural title Successful Farming. The outcome breaks with a 10-year trend; in the most recent decade sow numbers of the country’s 40 largest swine integrators had been growing non-stop. Smithfield Foods (part of the Chinese WH Group) topped the list with 915,000 sows, followed at a respectable distance by Seaboard Foods (340,000 sows) and Pipestone System (274,275 sows).

Expansion in earlier years and Covid-19

The disappearance of Maxwell Foods was left out in the list. The producer, with 55,000 sows, decided to clean out its pig houses in late 2019. In total, 16 out of 40 pork producers cut back their number of sows, there was no change with 14 of them and in 10 cases there was growth.

Covid-19 in combination with expansion in the years prior led to the crisis in the US swine industry. The worst time was in April and May, when hundreds of thousands of finisher pigs had to be euthanised as there was no slaughter capacity.

Pig prices increase

Pig prices have been increasing again in the United States since September. That is partly related to the fact that there are more possibilities to market the hogs. In addition, US analysts expect that by the end of the year, the number of pigs will come down. The US Department of Agriculture (USDA) estimated that the average price for finisher pigs in the last quarter of 2020 will be € 0.95 per kg of slaughter weight. That is 18% higher than the price in the last 3 months of 2019. By the end of September, early October, the US pig price was even higher than € 0.95. From figures by the European Commission, it appeared there was a price of € 1.21 per kg slaughter weight in the USA.

New emergency package is necessary

The US pork producers have not completely recovered yet. The US National Pork Producers Council (NPPC) therefore launched a plea for a new emergency package. Because of Covid-19, hog farmers of all sizes went bankrupt, said NPPC president Howard A.V. Roth in a press release. According to NPPC, US hog farmers are facing $ 5 billion in collective pandemic-related losses this year, following 2 challenging years due to trade retaliation. The NPPC therefore called for additional help to keep a strong, competitive pig industry in the US alive.

That would include the following provisions:

• Compensation for euthanised and donated hogs;
• Additional funding for animal health surveillance and labs, which have assisted and shared resources with their public health partners;
• Modification of the Commodity Credit Corporation charter so a pandemic-driven national emergency qualifies for funding;
• Additional funds for direct payments to producers without restriction; and
• Extension of the Paycheck Protection Program with modifications to make it accessible to more producers.