I am feeling really bummed today. With the “siberian-like” temperatures we have this weekend in Minnesota, I thought I would spend some time in my office and work on our year-end farm analysis. I wish I had done something else. It’s days like today how this is the part of farming I hate and also how it affects sustainability.
In case you are not aware, prices for everything we raise (pigs, corn and soybeans) are very low. We just sold a group of hogs and I can honestly say it has been a very long time since we sold pigs for such a low price. And it stinks.
What did our pig check cover?
As I looked at our records, the check we received didn’t cover the cost of the pig (when it arrived on our farm at 3 weeks of age) and the feed. What else did it not cover? Well for starters — hired labor, veterinary, supplies, repairs, heat, electricity, insurance, interest, building costs, etc. Yes, this means we worked for nothing. Nada. Zilch. But this check was less than nothing because we still have to pay for all the other expenses it did not cover.
Sigh . . .
It’s Risky Business
On our home farm, we only sell twice a year, which means we won’t sell again until June. Yes, that is a lot of risk but it’s just how our farm is setup.
And the price of corn and soybeans are not any better. The one bright spot is we had good corn yields this past fall. While it’s hard right now to find a bright spot, we have been in this same situation before. It’s just been a while. My head knows that.
But that doesn’t help my emotions. You just feel discouraged. Don’t get me wrong, this isn’t devastating – I just don’t like it. I try to find bright spots so I can at least crack a smile. But it’s hard and that’s why this is the part of farming I hate.
As farmers, we need to make a profit. We need to pay our bills and make repairs and upgrades. We also need to put food on our table. If we don’t make a profit, farming is not sustainable. Period.
So why are pork prices so low? Much of it has to do with the stronger U.S. dollar, we have a lot of pork on the market and we are also short on meat packer space. As far as the stronger U.S. dollar, it makes the pork more expensive for other countries to buy our meat. And traditionally, the pork industry exports about 25% of the pork produced in this country.
So now what?
Going forward we will continue to monitor our costs and “tighten our belt” where we can. Often people will ask where we take shortcuts if prices don’t cover costs. Would we take a shortcut on animal care? Absolutely not. The bottom line is we can only sell healthy pigs so we will not take a shortcut in their care – even if that means working for nothing. Plus, it’s the right thing to do.
We know this will not last. We also have farmed long enough that our costs are quite a bit less than younger and mid-level farmers. That will be our advantage going forward through this bump in the road.
So as consumers, please take advantage of the low meat prices at your grocery store. Recently, HyVee was selling Hormel pork roasts for $.99 per pound. I even bought a couple because I couldn’t pass up the bargain.
People say they want farmers to be more transparent. Well, this is transparency folks.
As I remind myself . . .
We are in this for the long haul.
We will become more resilient.
We will be more appreciative of better times ahead.
We will be better farmers.
And tomorrow will be a better day.