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Politics

Decades Of Pork Efficiencies Falter Under Pandemic

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The country’s food supply chain has faced serious tests this year. Pork producers learned that first hand in April, when several midwestern meat packing plants closed due to COVID-19 outbreaks.

A three-week shut down of Smithfield Foods in Sioux Falls displaced about 300,000 hogs. And that has ripple effects across the industry.

It was mid-April when Brian Mehlhaff saw the writing on the wall.

As processing plants closed their doors, hogs were getting moved to the plant he sells to. That meant the farmer from Parkston could no longer slaughter as many hogs as he needed to.

“When that started happening, then we heard about Smithfield was going to shut down,” Melhaff says.

That’s when he got a call from a local butcher. The guy said people were calling him about who had pigs for sale. “And I says ‘yea, I’ll sell some,'” he added.

That’s when Mehlhaff realized he might have another option besides the packing plants. He put ads up on Facebook. Mehlhaff says he posted in about a dozen ag-related groups that he had hogs for sale. And it went viral.

“My phone started ringing and it didn’t quit ringing until one thirty that morning,” Melhaff says. “It started up again at five the next morning.”

Melhaff says Facebook took the ad down by 9 am that morning—because the site doesn’t allow livestock sales on the platform. But in just 12 hours, he was able to move some pigs at a $50 loss.

“But, it had already been shared over 10,000 times,” he says. “We had a very good response. We sold over four-thousand head.”

That was more than a month ago. Melhaff says that market has leveled off because other farmers started selling pigs the same way. He’s still delivering pigs from those sales, but not selling too many new ones.

That’s because when Smithfield closed its packing plant in mid-April it was just one of several in the region that closed.

The Smithfield plant alone slaughters about 100,000 hogs a week. The industry was able to move some hogs into other processing facilities like butcher shops, but it couldn’t make up the difference.

Nationwide, meatpacking plants process about 495,000 hogs each day. Once COVID-19 shutdown several Midwest plants, that number dropped nearly in half.

The way pigs are raised is very different from a few decades ago. That’s when hogs were kept outside and seen as a source – of fat.

“At some point along there pigs were pretty fat. Lard was more valuable than the pork was—at one time," says Dave Uttecht, a pig farmer south east of Huron.

“Back in the WWII days that was pretty important. When consumers started thinking about their health and the health of their food—which really started to come around in the 80’s—nobody wanted a pork chop with three inches of fat on it,” Uttecht adds.

Think: The Other White Meat.

Uttecht says after that the consumer wouldn’t buy fatty pigs anymore.

“I knew farmers that would raise pigs that they couldn’t sell because they were too fat. So, packing companies quit buying them," he says. "We were all forced to go with a leaner pig and that leaner pig did even worse outside than the fatter one.”

So, farmers brought their hogs indoors. Barns allow for a more consistent product at a reduced cost to produce. Temperature-controlled barns let pigs gain weight eating less food. Uttecht says the barns have been a big improvement. And it means year round work for meat packers, as opposed to surges of  animals coming in at certain times.

“So, then you start backwards from the consumer—HyVee, Wal-Mart, McDonalds—they all want their product just in time," Uttecht says. "They don’t want to have a whole warehouse full of pork. They prefer most of the time it be fresh at the grocery store.”

It’s a low inventory, low cost, just-in-time kind of system.

Glynn Tonsor is a livestock economist with Kansas State University. He says there are days of wiggle room in the system, but not weeks.

“For lots of economic reasons, it’s been built that way over time,” Tonsor says. “In many ways, that’s worked, up until COVID. That bottleneck has been stressed largely because it’s heavily dependent on labor. Challenges with a human pandemic are front and center with that discussion.”

While that bottle neck is getting worked out, Tonsor says the result is lower prices for the farmer, and higher prices for the consumer.

But it’s not just the supply chain disruption that’s been affected by the pandemic. Consumer demand has also changed.

Meat products are destined for one of three channels: grocery stores, restaurants or exports.

“And it’s not simple to shift that over,” Tonsor says.

Tonsor uses the example of bacon. Bacon in the grocery store generally comes in a one-pound package. Restaurants buy a lot of bacon, and they buy it in bulk. But now many restaurants are closed.

“It’s not just shove bacon from one channel into another,” Tonsor says. “It doesn’t work that way seamlessly, quickly, and for free. We had no shocks at play in March and early April. By the time we got to middle April, we had the plant operating bottleneck added to it. So, massive, massive shock to the system.”

Tonsor says it’s easy to forget about the benefits of our food supply chain system during a pandemic.

Between 2009 and 2019, Tonsor says the U.S. Pork industry expanded production, exports and domestic consumption. He says South Dakota farmers contributed to that.

“There’s a lot of efficiencies in the system that gave the U.S. Pork industry a favorable foot domestically and foreign marketing-wise that have to be recognized and not stepping away from too hard out of the presumption that a different system would be more resilient against pandemics,” Tonsor says.

Right now, processors and meat packing plants have a massive backlog of hogs to work through. And there are more coming every day. Pig farmer Brian Mehlhaff says until the plants are back up and running, it’s going to be difficult.

“I don’t know what’s going to happen. I hope it doesn’t get to the point where we have to euthanize pigs, I really do,” Mehlhaff says.

That has happened in some states like Minnesota. But for now, Mehlhaff says he’ll try to find a market or a buyer for all the hogs he has in his barns.