2 million pigs backed up on farms, plants still short labor, but there is good news
By Betsy Freese, Successful Farming
Agriculture.com - 5/19/2020
COVID-19 dealt a body blow to the pork industry. Christine McCracken, executive director of animal protein at Rabobank, breaks down the financial impacts of the pandemic on the animal protein sector globally. Here is the good, the bad, and the ugly, as well as the unknown.
Harvest levels at packing plants are normalizing.
We have backed up close to 2 million hogs on farms.
Most packers have the labor to harvest, but they don’t have enough people to debone, trim, and get pork in boxes to retailers in a form they want. Some workers lack enough incentive to get back into the plant, or they fear catching the virus.
“In the short run, we are not going to be able to maximize the value of the carcasses,” says McCracken. Retailers don’t have the cooler space or the labor to slice product in stores.
Plants have spent hundreds of thousands of dollars on temperature scanners, barriers, personal protective equipment, and extra cleaning and sanitation just to keep the plant open, she says.
“We’ve raised wages in these plants. Are we going to be able to take them off once all of this is over? The higher costs that we have put in place are going to impact the competitiveness of U.S. pork going forward.”
McCracken sees the possibility of more government involvement in the packing industry. “More stringent regulations add additional cost. If that becomes an issue, it could make us less competitive in the long run.”
Consolidation of swine operations won’t be as much as you might expect, says McCracken. “I don’t see a lot of packers anxious to buy additional production assets, and I don’t see the international investment in the sector.”
The Bad (sort of)
The industry is liquidating the least productive females and sow farms with ongoing disease issues. That means a shift toward higher productivity long-term, which may offset some of the sow liquidation, and create more pigs in the end. Let’s not worry about that yet.
The Good ...
The Bad ...
The Unknown ...
The Good and Bad ...
The Unknown (for Canada) ...
The Bad (for Mexico) ...