Since I have been continuously shoveling and snow-blowing my driveway this past month, I have had a lot of time to reflect. Thinking back to the mid-’70s when I was in high school, believe it or not the Minnesota Vikings football team was in the Super Bowl. Of course, those of you under the age of 40 wouldn’t remember that.
I also reflected back to 1975, when a tremendous blizzard hit the Midwest. I remember my father and I had to get to the hog barns to check on the pigs. One barn had the feeders and waterers outside. As my dad and I were walking, I told him we were standing on the roof of the barn! He didn’t believe me at first, but as we started digging, he realized that’s exactly where we were. We did not have electricity for several days and, since water and feed were outside, the pigs struggled and we unfortunately lost a few. We worked as hard as we could to get feed and water to the hogs, but the snow and the cold were too much. I remember how stressed my father was in trying to take care of the pigs and the hours we spent digging and shoveling snow. The only good thing I remember from this timeframe is I didn’t have to watch another Vikings loss.
The reason I bring this up is there are people who are not familiar with the livestock industry that are questioning why we raise animals in confinement. I can clearly tell you, back in 1975, if we would have had our livestock in confinement where they had access to water and feed, we would not have lost the animals that we did during that blizzard.
There are very sound reasons why hogs are raised in climate-controlled buildings, providing them with adequate feed, water and protection against the weather – hot and cold. All of us involved in the industry must continue to educate the public about the livestock sector and how these processes/efficiencies are the right choices for the animals and our businesses.
Looking at 2011 – As I write this article on Dec. 22, hog futures for next summer are over $90 for June and July. If you take the average price on the board for the Chicago Mercantile Exchange (CME) for 2011, that price is over $84/cwt. The crazy part, with hog futures prices so high, is it still only gives an average profit of $5-$10/head. Corn prices being close to $6/bu. for all of 2011 puts breakeven prices close to $80/cwt. or $160/head, depending on sale weight.
These price levels put us very close to where we were in 2008, and we still have not even thought about planting next year’s crop. The successful producers of today are managing this volatility by managing margin and not trying to over-analyze what may or may not happen to the grain or hog markets.
When things are this volatile, it is very difficult to predict what could happen. Therefore, sticking to a plan that focuses on a margin you can accept is crucial to survival.
Putting Things in Perspective – In closing, it is important to keep things in perspective. This past year, I have realized that faith and family are the most important things in life. We need to take time to cherish both. In the grand scheme of things, the markets are immaterial.
Happy holidays and best wishes for the New Year.
Swine Industry Consultant
Contact Greenwood at [email protected]