September 12, 2023
The U.S. pork industry is experiencing a compound effect of a lot of negativity. Lori and Dale Stevermer of Easton, Minn., see that, hear that and live that.
“Profitability has not been good for most of the past year,” Dale says. “Some recent predications from economists say that this is as bad or worse than in 1999, and that was kind of a bellwether year.”
The Stevermers operate Trails End Farm in Faribault County, Minn., where they custom-finish hogs as well as have solar energy, corn, soybeans and cover crops in their no-till system.
“Input prices are high,” Lori says, “but it’s varied a little bit. Early spring, our market prices were low, and in early June, when we should have gone into a rally, we didn’t — so that hurt.”
A market price rally did materialize, but input prices have remained high. “We were losing 30 to 40 bucks a head in the spring, and we lost less in early summer, and we had a little bit of black ink probably a month or so ago,” she says during a visit in late August. “I think now we’re just kind of trending either side of profitability.”
The angst of the Stevermers is that the situation may not improve in the short term, as “in the fall, which typically our prices go down because more pigs and more weight head to market — that everybody’s concerned that we’ll dip back down again.”
Dale admits their crystal ball looking at input costs is as clear as the foggy windows on this hot and humid summer day. “When you look at today’s prices, in June it was $6.50 for corn, today is $5.50 or under and they’re looking at October-November being $4.50,” he says. “That makes a big difference in the cost structure.”
Risk management practices such as livestock insurance and proper use of options benefit producers, so that “the losses for operations using those were not as deep,” Dale says. “But now they have market forces working against them to look at fourth quarter, and [are] probably locking in a loss.”
It would be one thing if producers only had to worry about high input costs and hog market price fluctuations. “It’s that combination of poor prices, challenges with PRRS [porcine reproductive and respiratory syndrome] and health and then — oh, by the way, there’s Prop 12,” Lori says, referencing California’s Proposition 12, which sets a standard of how sows can be housed and bans the sale of pork in the Golden State unless the sows were housed in operations meeting those standards, regardless of where those hogs are raised.
Hog producers, like most other families, face rising costs of insurance, LP, “all those other things going up, too, so it’s just kind of one thing on top of another.,” Lori says. “That frustrates people and gets them to a point where they just go, ‘I don’t think I want to do this anymore.’”
Dale foresees further consolidation within the U.S. swine industry driven by the current economics, compounded with the labor shortage issue and lingering herd health issues. The Stevermers made a similar decision six or seven years ago when they sold their sows and switched to custom-finishing pigs for Compart Family Farms.
Regardless of the challenges facing the U.S. swine industry and its individual producers, the Stevermers sense the strength in their fellow producers. “I was encouraged at World Pork Expo [held in June], because I expected to see more negativism,” Lori says. “But I would say a lot of people were ‘Yeah, we’ve been through this before, we’ll get through it again.’ … There’s that resiliency. That’s what gives you hope. Challenges bring people together. You get those great minds together to say, ‘We can do this’.”
With most, if not all, producers battling one disease or another, the Stevermers feel that herd health is an area that can use a pooling of knowledge base to eliminate diseases — not saying work isn’t already being done toward that goal. “Industry is tired of putting up with disease,” Lori says. “Yes, PRRS is the thorn in our side, but maybe that’s too big of a one to take on. Maybe it’s PED [porcine epidemic diarrhea], or myco [Mycoplasmal pneumonia], but people are sick of just putting up with it. Let’s work together, and maybe we can eliminate one disease at a time.”
With the emergence of PED in the United States in 2014, the industry learned more about the role that biosecurity, feed medications and vaccinations play in preventing, reducing and eliminating diseases from individual herds.
“We can eliminate a disease,” Lori says. “Let’s pick one that we can have success with. And then you’re like, ‘Yeah, we can do that.’ And then that flywheel gets going, and then the ideas spring and you get going — and that’s encouraging.”
Importance of sustainability
The Stevermers have always had an eye on the future, and that includes doing what’s right for people, pigs and the planet, adhering to the National Pork Board’s We Care Ethical Principles.
Dale has three years’ worth of data from participating in the Pork Checkoff-funded Pork Cares Farm Impact Report, in addition to the compilation of data from Minnesota for the 2022 crop year as well as results from the entire country. He feels good about where Trails End stands. “I believe that I’m on the forward edge of what the state is doing,” he says. “But some of that is just the overall location dynamics that come up — whether it’s the soil I’m on, weather, tillage practices and things like that all factored in.”
Knowing where the Stevermer operation stands environmentally is important to the bottom line, but it also offers leverage when speaking on a higher level.
“The most important part for me was to learn what we’re doing, but also provide data for organizations such as Minnesota Pork to show what Minnesota producers are doing,” Dale says. “This is real data; this is not a model. This is real data that’s happening on the farm.”
He sees the value in being able to present that information at the state or county level, or even on the global scene. “Overall, the bigger picture is the role of the sustainability metrics is going to be greater for us as we try to maintain our international presence in the markets. Other countries are putting together some numbers, and we have to show why the United States pork is the best.”
Lori and Dale have a finger on the pulse of the industry, not only from their perspective on the farm and Lori’s off-the-farm job as customer success manager for Alltech’s U.S. Pork team, but also from leadership roles. Lori is president-elect of the National Pork Producers Council, taking over as president at next spring’s Pork Industry Forum. Dale is one of the 15 directors of the National Pork Board.
Lori served as president of the Minnesota Pork Producers Association, while Dale served as president of the Minnesota Pork Board.
Starting when Dale was asked to run for the Faribault County Pork Producers, he says it has always been about the people. “It’s been the people that were involved at the county and state level, and as I got to know them it’s like ‘I want to be there and making decisions with them.’ And it’s the same at the national level.”
Lori agrees with Dale, adding that involvement was bred into them. “Both of us come from families that volunteered and have been involved with organizations and in the community. … NPPC and NPB are organizations that we wanted to be with because we feel strongly about being in agriculture, and these organizations are making a difference. They’re tackling the issues that I feel are important, and I want to be a part of it.”
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