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Archive for Saturday, December 26, 1998

DECLINING HOG PRICES HIT HOME

December 26, 1998

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Record low hog prices are taking their toll on one Douglas County farmer, but he doesn't intend to give up the business.

With hog prices at their lowest point in 40 years, Douglas County farmer Phil Metsker and his brother decided to donate two butchered hogs to local charities.

They spent $257 to butcher the hogs weighing more than 200 pounds each.

Together, they could have sold the animals for about $60.

"We can't get nothing out of them," Metsker said. "Might as well give them away."

Metsker, now 44, has been in the hog business at his family farm near Lone Star since he was 14.

Over those 30 years, the business has had its ups and downs, but it's been all down lately.

"Really, with inflation and everything, it's the worst it's ever been," Metsker said Thursday, standing among the cluster of metal buildings and outdoor pens of his hog operation.

In the 1970s, the price of a hog was less than 20 cents a pound and a brand new tractor could be had for about $10,000.

This month, some hog farmers received less than 10 cents per pound. Meanwhile, some new tractors cost more than $100,000.

The latest decline in the market has been a swift one, Metsker said.

A year ago, hog prices were more than 40 cents a pound. Two summers ago prices were above 50 cents a pound, he said.

The crisis prompted the U.S. Department of Agriculture to buy up $15 million worth of pork in an effort to boost hog prices. The meat, 50 million pounds of it, was to be donated to food banks.

Farmland Industries took steps of its own this week, putting a minimum price of 15 cents a pound on the hogs it buys from its producers.

Metsker is unimpressed by the gesture. He would like to see store prices of pork products lowered more drastically to encourage sales.

See Hog prices, page 3B

Metsker raises feeder pigs, juvenile hogs born on his farm that are then sent to other operations to be raised for market. Metsker sells the young hogs at about eight weeks of age. By then they weigh about 50 pounds.

Last December Metsker was getting $40 for a 50-pound hog. This year he's getting $10.

For Metsker, $35 a hog is the break-even point.

It's a combination of things all at once that have caused the problems, he said.

The market has been flooded by the recent proliferation of factory farms.

"Murphy Family Farms (in North Carolina) has 380,000 sows," Metsker said. "I have 380 sows."

The troubled economies of Asia are taking their own toll.

"China is a big customer for us," Metsker said. "They can't afford it."

The same goes for the Japanese and the Russians, Metsker said.

Meanwhile packing plant strikes in Canada have pushed Canadian pork south of the border for processing, inundating the packing plants in this country.

"It's just all around," Metsker said. "It hit us all at once."

Metsker would proudly compare the quality of his feeder hogs with any in the world. Over 30 years, he has gotten good at raising the animals.

With the help of a computer he has data on each sow.

Each of his 350 sows gives birth to an average of 22 new pigs in 2.4 litters each year. It equates to more than 7,000 baby pigs annually.

The sows nurse their young ones in climate-controlled pens.

And Metsker guarantees they are disease-free and 53 percent lean.

Quality or not, he's having trouble selling them this week.

"We've got 250 head in the end barn," Metsker said. "They were ready last week. We can't find anyone to buy them."

The only mitigating factor is the low price of the grain he feeds the animals.

But since he farms 1,600 acres as well, "It's kind of a double punch to us."

And unlike grain, which can be stored in hopes of an improvement in the market, hungry hogs don't store easily.

"We wean pigs every two weeks," Metsker said.

The hog market has changed since Metsker got into the business.

Back then, he said, "about every other farm up the road had a few pigs. Every farm had a few cows ... a few chickens."

Just like with farming, hog operations have gotten bigger.

And there are fewer of them.

Even five years ago, Metsker estimates there were a dozen small hog operations in Douglas County.

Now, he says, "I am it."

Metsker doesn't plan to follow suit by scaling back.

"I don't know what else to do," Metsker said.

Instead he plans to expand his operation to 1,200 sows.

"I'm going to have to get bigger if I want to stay in it," he said.

Over the next two years, Metsker intends to build buildings and hire more people.

He is going to target a niche in the hog market: middle-sized operations needing a regional source of quality feeder hogs.

And he figures to continue competing with the big boys.

"I hope some of the corporate farms go broke and still leave room for me," he said. "I just hope I can outlast them."

-- Kendrick Blackwood's phone message number is 832-7221. His e-mail address is kblackwood@ljworld.com.

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