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Veteran Contributor

Has the hog industry consolidated this much?

this chat is dead!  A long time ago this chat is probably what brought my to this site in the first place.  I had way more hogs then,  I still have 5000 head of finishing space but all the bigs wanted to rent it so bad and do the chores for me that I dont even have anything to do with hogs anymore just get the check and make the building and elect. payments.  Is this happening to everyone along with the others with smaller operations quitting?  Wow things have changed fast.  Whats the future bring?  I am happy with my place in the industry even though its not where I ever thought I would be.  I thought I would be choring and owning the hogs but I guess not. 

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5 Replies
Veteran Advisor

Re: Has the hog industry consolidated this much?

I think it has.

I quit hogs 2 years ago, and ran into the guy that ran the collection point where I used to take them.  He commented that in 2006, they had a list of just over 200 names of people who brought them hogs that year.  They used to fill 2 semis a week, and often had to ask people to wait for the next load.   In 2008, it dropped to a little over 100, and one semi load most weeks..  In 2010, they were down to 5, with 2 of those thinking of getting out, and a straight truck instead of a pot, every 10 days to 2 weeks.  By late fall of 2010, they quit taking hogs there altogether.

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Senior Contributor

Re: Has the hog industry consolidated this much?

Which collection point was that at? Many packers didn't want to mess with the trouble of collection points. Easier to make the producer take whatever they had to the plant instead.

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Veteran Advisor

Re: Has the hog industry consolidated this much?

It was a collection point in central Nebraska.  Here was the thing, though.  The packer didn't have anything to do with it.  A few producers rented the old NFO facilities which had pens, a scale, and loading chute.  They would get a count of how many hogs, their average weight, and schedule delivery for whoever gave the best bid.  By getting the hogs together, they could market a potload at a time, and deliver it when the packer wanted (there were times I was sorting hogs on Sunday, so they could be at the packers at 7AM on Monday).   The hogs weren't sent to any one packer, sometimes they went to IBP, sometimes to Smithfield, often to Sioux City, and occasionally down south to Kansas, wherever they were wanted. 

The little guys just kind of got squeezed out, and I was one of them.  My facilities got to the point I either had to put a lot of $$$ into remodeling, or quit the hog business.

If you go to the NPPC website, they might still have up an interesting chart.  They have charted the 'industrial' hog numbers vs. the 'independant' hog numbers vs. the total hog numbers.  The 'independant' numbers were fairly consistent up until a few years after the checkoff started.  Then, they steadaly decreased until there are almost nont left. 
One old timer told me the time to get out of hogs was soon after the checkoff was instituted.  He said he raised chickens & eggs.  Not too long after they instituted a checkoff, the small independant producer was squeezed out.  He tried dairy, and the same thing.  It seems in his experience, the coming of the checkoff meant you either had to become 'big' or get out.

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Senior Contributor

Re: Has the hog industry consolidated this much?

When you mention "industrial," what size do you consider the term? Big business as a whole got a foothold around the same time. It may have been due to national politics as much as the checkoff. Look at the party of the federal government majority when the sudden shift of independent chicken, hog, beef, and dairy producers to "industrial" occurred.

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Veteran Advisor

Re: Has the hog industry consolidated this much?

I don't think he was actually blaming the checkoff, so much as taking it as an omen that the end is near.  From other talks with him, I think he was of the opinion that small, independent producers would in gereral be against a checkoff, and once it passes, it means that they are on the way out.

For me personally, the number one reason for getting out of the hog business was the loss of markets.  So many people either got big, or got out, and with them went the independant markets.  The big guys all had direct ship contracts with a certain packer, which I could not get for any kind of fair price because I just didn't have enough hogs to deliver a potload at a time.  When the time came to either put $$$ into facilities or get out, I was down to 2 local buyers, with one of them hinting of ending it, as well.  I'm too old to start from next to nothing and build a big facility that won't be paid for until I retire just for the pleasure of having hogs around.

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