Think About This: 10 Tips for Pork Producers in a Volatile Market

Outside perspectives can breathe fresh life and insight into your business. Listening to others can stimulate your own breakthrough ideas and open you up to new ways of thinking. Ten industry leaders in technology, economics, nutrition, health and more share advice for pork producers during a pivotal time in the swine industry.  

• “Communicate with your bankers and control costs. This is the time to be transparent regarding your operations, costs and struggles. Nearly everyone is confronting similar challenges and your bankers are aware of the headwinds, have experienced cycles like this in the past, and should be willing to work with you to find solutions. Being upfront with your lender about what you are currently facing can help see your operation through this downturn and ensure your long-term viability.  – Christine McCracken, executive director, protein analyst at Rabobank

• “As I write this, I am conscious that producers are facing multiple headwinds that are negatively affecting their bottom-line. Our industry still thrives with independent producers and growers, so I think it is a different point of perspective for each producer and production system. However, one thing that does come to mind because it is such an industry-wide recognized economic pitfall, is on-farm mortality. Whether profit margins are in the green or the red, improving livability at any production life stage can be very impactful. Certainly, there can be a multitude of causative agents to identify, but recognizing it first and benchmarking mitigation measures seems to be more in our control than other production variables.” –Kale Causemaker, senior director of sales for Innovative Solutions (a division of Kent Nutrition Group)
   
• “Focus on getting the best information you can to make decisions. Look for ways to automate information, sensors, cameras, controllers, and let people do what they do best – provide hands-on animal care and human observations. May be a sharp curve or two, but we will survive.” –Nicole Boettger, director North America Swine for MetaFarms
   
• “Control what you can control. Price risk is one of the areas where you have choices to reduce risk. Futures and options market trading is a tried-and-true method for managing price risk. Another tool is federally supported livestock insurance. Livestock Risk Protection (LRP) seeks to cover decreases in output price (lean hogs). Livestock Gross Margin (LGM) works to cover the decrease in margin between input prices (corn and soybean meal) and output prices (lean hogs). Recent updates to the livestock insurance products took effect July 1, 2022. With the revisions, the hope is to reach more producers, offer greater flexibility for protecting operations, and ultimately, meet the price risk management needs of producers. Remember the goal of price risk management is to minimize risk by limiting losses and increasing the probability of profit.”  – Lee Schulz, economist at Iowa State University
   
• “Pork producers have some of the grittiest work ethic and tenacity that I know. With grit should come grace. With all the outside pressures that continue to increase the difficulty of your job, it’s important to take some time to do things that make you happy and to keep driving towards a brighter future. Tough times never last, but tough people do.”  – Angie Bowman, swine application product manager, IoT and controllers for Munters
   
• “The advice remains pretty simple: to focus on the things in the operation that helps the bottom line. Look at the cost side of the equation and compare yourself to other operations to see where you can make changes to increase efficiency. Although profitability may remain difficult to achieve over the next few months, consider marketing alternatives that reduce downside risk. The next several months may prove difficult financially, but eventually, the industry will return to a profitable period, and those who manage through this tough time will be rewarded.”  – Scott Brown, University of Missouri economist
   
• “There are many variables that you just cannot control. Focus on what you can control, or what you can to the best of your ability. Work to strengthen your risk management strategy and if you don’t already have one in place, consider seeking guidance.”  – Brian Earnest, lead protein industry analyst at CoBank
   
• “We need to maintain vigilance around foreign animal disease. While I think the industry has done a good job of preparing, there is always room for improvement. I think we also need to have a deep discussion about labor. I’d like to see the industry more engaged on important immigration issues and I’d like to see more innovation in automation and more creativity around HR-related issues. Finally, I’d like producers to develop a longer-term business strategy practice. For fairly obvious reasons, we tend to focus on the next 12 months, but as the pace of change increases, it becomes more important to be thinking further out into the future.”  – Todd Thurman, consultant for Swine Insights International
   
• “Every conference I attend shows the biggest difference between those that make money and those that lose money in the pork industry is risk mitigation. This year has been pretty dismal for pork producers. My biggest encouragement to farmers (aside from disease elimination) is always to work with a reputable risk management company to offset some of the swings we have seen in this market.  – Wesley Lyons, technical services director for Pharmacosmos
   

• “If recent experience has taught people anything, it’s that a risk management program is invaluable. Those producers that did not buy into the hype late last year and got hedged likely are doing well right now. They will be well positioned to take advantage when market conditions improve.”  – Altin Kalo, head economist at Steiner Consulting Group

We will be uniting together June 5-11 for PORK Week across all of our Farm Journal platforms to elevate the important role the pork industry plays in feeding the world. Share your stories and post photos on social media using #PORKWeek23 to help us honor the pork industry. From “AgDay TV” to “AgriTalk” to “U.S. Farm Report” to PorkBusiness.com and everything in between, tune in and join us as we acknowledge the most noble profession there is: feeding people.

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