A New York Times article on May 14, 2020 noted that Iowa hog farmers would be euthanizing an estimated 600,000 hogs over the next six weeks, while Minnesota farmers already had killed 90,000 hogs. For these farmers, this pencils out roughly to losses of $96.85 million and $14.53 million respectively in Iowa and Minnesota (at $57.65/cwt for a 280 lb. hog). The National Pork Producers Association estimates that between April and September 2020 about 10 million hogs may have to be euthanized, at a loss of $1.6 billion to farmers.
The reason? The COVID-19 pandemic has struck workers in meat packing plants, either reducing operations or temporarily shuttering the plants so that these hogs cannot be slaughtered, butchered, and shipped for meat that consumers were expected to acquire—a justifiable reason for shuttering these plants. While at its peak, year on year processing was down by close to 45% of capacity; this has now narrowed to 20% as of May 18, 2020.
It is not that these hogs are no longer consumable as meat. There exists a deeper and more concerning reason for throwing them away that should trouble the farmers who raise these hogs, the people in charge of the packing plants that process them, and the consumers who demand a certain type of product both from the grocers and the service providers.
Large hog packing plants will only procure hogs of a specific size and quality. Anything outside those standards they reject. Hog farmers are unable to ship their pigs to these large plants once the pigs exceed the weight limit. But mega-hog farmers cannot easily find other processors. This means that if the plants cannot process the hogs at a specific time, the hog farmers must dispose of their overweight livestock. This is a monumental waste!
Large packing plants of major processors are set up to operate most efficiently with a fixed infrastructure including robotic cutting, specialized worker operations and packaging in order to garner the highest profit. They also contract with service providers such as restaurants and cafeterias and with grocers that only want cuts of specific sizes and forms that the average consumer demands. Packer profitability and consumers’ narrow demand are driving waste.
The shortage in the slaughter industry has generated higher prices for the consumer, more profit for the packers, and losses for the hog farmer. While the July futures markets may show a live hog price of $57.65/cwt, the actual USDA daily carcass price for cornbelt hog packers had a weighted average of $37.85/cwt and nationally was $36.90/cwt, while the national live weighted average price was $30.02/cwt.
Nevertheless, the weekly primal loin value was $160.69. This spread indicates that hog farmers are effectively subsidizing — at their loss — the enlarged profits of the packers, while consumers are paying inflated market prices due to irrational demand.
We should question why packers are unwilling or incapable of adapting their operations, even on a temporary basis, to process overweight hogs.
We should also raise the consciousness of the consumer to restrict their purchases of only specific product characteristics. Years ago when we farmers did our own butchering, we took every part of the animal and put it to some use, no matter the size of the animal or the size of the cut.
While we as farmers are partially responsible for over-production of not only livestock but grain, dairy and other products, we should address the processing structure, too.
Smithfield Foods, the world’s largest pork processor, owned by WH Group, is vertically integrated in the U.S. and raises and owns 50% of the hogs that it processes in this country.
Smithfield, JBS, and Tyson (IBP) have the capacity to process 304,600 hogs daily (60% of total U.S. processing) at 22 different plants. Some 44 other companies have capacity to process the remaining 40% (202,000 hogs) at 46 plants, and of these 14 are primarily handling only cull sows for sausage.
This is a concentrated industry which deters competition and effectively sets the terms of purchase. Both farmers and consumers should find ways to break up these oligopolies for the benefit of the producer and consumer.
Only 10% of cattle are exported, while more than 20% of U.S. domestic pork production is exported — 26.9% in 2019. Congress and the Department of Justice have failed to correct this market concentration.
The media is also reporting that many farmers are experiencing emotional and mental trauma from euthanizing so many animals in a single day. Representatives of these farmers are calling for mental health support to assist farmers.
Their experience cannot be much different from the psychological effects on workers on the kill floor who must deal with the same thing every day. Effectively in our society, these workers are considered disposable persons.
We need to directly confront the structural problems in the packing industry, the concentration of both packers and increasing economy-of-scale farming, driven by the unadaptable demands of consumers.
Michael Slattery is a diversified grain farmer from Maribel, WI. He is a member of Wisconsin Farmers Union.