As Challenges Continue to Mount for Pig Farmers, One Says 'No Crying In Our Napkin Here'

Challenges are just part of the pork industry. There’s really no way to avoid them because there’s no way to control every variable that goes into pig farming.

During the Farmer Forum on Jan. 19, AgriTalk’s Chip Flory asked two pig farmers to weigh in on the challenges and opportunities ahead in 2022.
Central Illinois pig farmer Chad Leman was quick to point out that the threat of African swine fever (ASF) looms heavy on his mind with its outbreak in the Dominican Republic last fall. 

“We've got an opportunity for profitability in the next four quarters right now, even with $6 corn and $400 meal, which is kind of amazing to think about. You can hedge profitability, but yet I don't want to hedge myself out of out of some big profits. However, if ASF hits and we're looking at an absolute disaster, we're going to look back on these opportunities and say, ‘Well, what didn't we like about locking this in?’ That's always looming out there as sort of a black swan that it could or could not show up.”

Knowing when to leave potential profits on the table is always a challenge, Flory added. 

Randy Francois, an eastern Iowa pig farmer, said he’s taken a systematic approach on his farm to not lock themselves into one risk management tool. He’s using packer contracts and LRP (government program) contracts and putting some options and futures on the board depending on which period he’s looking at, which group of pigs he’s looking at and how flexible his operation can be in that period.

“With the looming ASF out there, we have a catastrophe plan in place in case the ASF would come,” Francis said. 

He said it’s important to have a safety net in place, especially going into the 2023 Farm Bill and more unknowns. 

Reasons for Optimism

“Yeah, we’ve got hurdles and obstacles, but we're not sitting in a coffee shop crying in our napkin,” Leman said. “You have to see the glass half full in this business and say, ‘Yeah, we're dealing with record feed prices. We're dealing with record labor shortages, but there's profitability in this if you are careful and pay attention to detail.’”

Francois admits he can’t help but be optimistic looking ahead at the price outlook for corn throughout 2022, even 2023.

For Leman, having a strong labor force is something he doesn’t take for granted, especially during times like this.

“It's exciting to be able to have the labor force we do on our farm right now,” Leman said. “We've been able to maintain that where we've seen other businesses fall apart there. Good relationships with employees over the last 10 years certainly seems to pay dividends when we hit these kinds of times. It's great to have a great team.”

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