When the hog market's in a slump, it makes more sense than ever to match marketing weights to packer preferences, believes Minnesota pork producer Linden Olson of Worthington, MN.
That's especially true for those lightweight finishers. If you eyeball weights and a few of those "lights" end up in the group, some packers will dock them up to 50% off the market price, warns Olson.
But that won't happen if you send quality, lightweight market hogs to Sioux-Preme Packing Co. The Sioux Center, IA, packer has developed a buying matrix that greatly reduces the discount for lights. Producers can actually get a premium for a 200-lb. hog with a 42% or higher primal lean carcass, says Gary Malenke, company vice president. (See Table 1 on page 74.)
"That's the main reason I like Sioux-Preme's program," reports Leon Puhrmann, coordinator of Topline Investments, a 13-member producer cooperative feeding group in Germantown, IA. Whether you mistakenly include a couple of lights with a load or intentionally add a few lights to fill out a group, Sioux-Preme will pay you a fair price on your lightweight hogs, he says.
Sioux-Preme's Evolution Sioux-Preme Packing Co. has been in the hog slaughtering business in northwest Iowa for 28 years. Being a smaller plant, killing only 2,500 hogs/day, the employee-owned firm has traditionally worked with 50- to 200-sow pork producers within a 50- to 100-mile radius of Sioux Center. They have always bought some lightweight finishers, Malenke explains.
Many of those producers have gone out of business in recent years. The company realized a few years back the difficulty of a small packer in competing.
To survive, Sioux-Preme officials reasoned the company would have to build its focus as a specialty packer.
Focus On Buying Light Sioux-Preme has now developed a specific buying matrix or grid which caters to light finishers. And the firm opened a cutting plant in Sioux City, IA, to bone-out the fresh pork.
"To be honest with you, we've purchased some lightweight pigs of wonderful quality," Malenke says.
"If Sioux-Preme would have tried to focus on buying lightweight market hogs five to six years ago, we would have probably ended up with a bunch of junk hogs," he continues. "Most finishers were continuous flow and most lights were simply the poor-doing hogs in a group."
There are still some poor quality, lightweight hogs out there, but Malenke stresses he's not in the market for them.
Rather, Sioux-Preme is looking for quality, lightweight hogs, those that simply didn't grow as fast as the rest of the group for whatever reason. The quality of the meat is still good and that is what Sioux-Preme wants and will pay for, he emphasizes.
Marketing Light Hogs What's their ideal light hog? "We are really looking to the 170-230-lb. live pig as the ideal weight," Malenke observes. "This hog will dress out at about 130-160 lb. carcass weight."
With the advent of all-in, all-out, 1,000-head finishing barns, producers are developing quality market hogs. However, some grow slower and end up as lightweights. They must be moved out for the next group. Producers are realizing it is costly to move those lights out to another facility and are beginning to see the advantages of marketing those as lightweights, according to Malenke.
It's a matter of figuring any added income versus the added cost to take them somewhere else, says Minnesota producer Olson. "If it's just one or two hogs, it may not pay to ship those lights separate," he says. But when 5% or more of the group falls into that category, it might be worth thinking about."
Producer Mark Schuiteman of Sioux Center is a case in point. He has 2,200 sows in three locations. His farrow-to-finish operation produces about 40,000 market hogs a year. In order to get the most for all of his hogs, he has developed a three-stage marketing program. He ships 240- to 290-lb. hogs to Farmland Foods at Denison, IA; 210- to 240-lb. hogs to John Morrell & Co. at Sioux City, IA, and the lights, 180- to 210-lb'ers, go to Sioux-Preme.
Schuiteman explains the low market prices don't justify the cost of feeding the lights to heavier weights. They eat twice as much and gain half as much, producing a 4:1 feed conversion ratio in his outside, overflow facilities in winter. It's better to simply haul them the short distance to Sioux-Preme.
"Sioux-Preme has really brought their payments up on the light end and given us top price for these light hogs," he says.
Out of Schuiteman's 1,000-head finishing barns, there are about 50 "poor-doers, " roughly 5%. His goal is to tighten up those groupings to reduce the variation in growth and number of lightweight finishers. The problem is, the 1,000-head finishers aren't really big enough to permit closer sorting.
"That's why when we went to these 1,000-head finishers, they produced a problem of how to empty them fast enough," he says. "We want them empty in a week and a half. Most times it works with this three-tiered marketing program because Sioux-Preme has given us an out on those light hogs."
At Topline Investments, the 13 producer investors have been purchasing segregated early weaned pigs from Nebraska. All those pigs move into a 14-room, 8,400-head nursery until they reach 45-50 lb. These pigs turn out very uniform in size, says coordinator Puhrmann.
>From the nursery, about 40% of the feeder pigs go to eight, 1,100-head contract finishers. The rest of the pigs go to independent producers in the area.
The cooperative feeding group markets about 30,000 head/year. Lights average only 1-2% or 10-20 per barn.
"If you have some health trouble, you might get up to 4% lights," Puhrmann says.
About half the Topline group's hogs are sold to Hormel in Fremont, NE, with the other half being trucked to IBP at Storm Lake, IA. The remaining lights, ranging from 180 to 210 lb., go to Sioux-Preme.
"We don't hold anything back," vows Puhrmann. "When the time is up, we figure it doesn't pay to fight them any longer, so they go to slaughter.
"We sent a load the other day, 57 head averaging 190 lb. and the other 40 head averaging 235 lb. We got top value for the 235-lb'ers and 88% of full value for the 190 lb'ers," he notes.
"That's what we really like about selling some lighter-weight, mixed groups to Sioux-Preme. They will sort them for you there and you don't have to worry about losing up to 50% of value if you didn't sort the group correctly," he says.
Topline Investments is an outgrowth of Topline Feed & Supply of Germantown, IA, which Puhrmann manages. His firm coordinates the trucking, handling of feed, records and oversees the employee management firm which provides staff for the cooperative venture.
Collection Points Sioux-Preme has three lightweight hog buying collection points in Minnesota at Worthington, Russell and Morris, plus one at Alexandria, SD, and another at Fonda, IA. Producers using this service have their choice of paying the trucking cost or having it deducted from their check.
According to Rob Mouw, head hog buyer, Sioux-Preme slaughters an average of about 1,000 light hogs/day. Goal is to expand that to 70% of kill capacity.
For more information on this program, contact Rob Mouw at 712/722-2555 or 1-800-735-7675.
Processing The Meat About two and a half years ago, Sioux-Preme added the cutting facility in Sioux City, says Kenneth Mouw, company president. That permits boning out primal cuts like shoulders, loins and hams. Those fresh pork cuts then go to custom meat houses for further processing.
Much of the smaller cuts produced by these lightweight hogs are finding their way into foodservice programs. He says the future looks bright for quality smaller pork cuts. White tablecloth restaurants are starting to show interest.
That's encouraged Sioux-Preme to study the next step. Officials plan to look at the eating qualities of these lighter-weight finishers.
"We hope to really define this product and what the restaurant will pay for it," says Malenke.