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Contract Hog Production Changes Face of Industry

Posted on: Wednesday, 8 February 2006, 21:00 CST

Pork production in Illinois has made a turn-around, but it has come with some changes in the industry.

When the Illinois Pork Producers Association announced its pork producer of the year last week, the winner was a family who has gone into contract hog production.

Jim Scheetz, a pork producer from Niota, wanted to be able to bring his four children - Joe, John, Jason and Katie - into the family farming and pork operation. To do that, he took the operation from 50 sows to 6,600 by partnering with TriOak Foods. Yearly production is 120,000 pigs per year, and the Scheetzes have 20 full- time workers.

The Scheetz family represents one of the changes in pork production in Illinois - and one of the reasons it's coming back strong.

At the IPPA's recent annual meeting, membership hit more than 1,000 members, and the number of attendees and of trade-show exhibitors were up correspondingly.

Just a few years ago, many wondered if the organization would survive at all. Pork prices had hit a devastating 10 cents per pound, and producer after producer was being forced out of the business. Now, pork prices are much higher, producers like the Scheetzes have restructured their operations, and new producers are getting into the business.

Mark Gebhards, executive director of the Illinois Farm Bureau's governmental affairs and commodities division, ran the IPPA for 91/ 2 years during some of the toughest times.

"I think the comeback is a combination of several things," Gebhards said. "Timing is everything. The market has been extremely positive, and that makes a big difference. But also, the thing that impresses me and pleases me is those producers who stayed in the business have come out stronger."

He also credits a state focus on livestock development the past three years. Several commodity groups, including the Illinois Farm Bureau, formed the Illinois Livestock Development Group and hired a full-time executive director to help situate new livestock operations and help existing ones expand. Several packing plants also have been built or have changed hands and stayed open.

"The other thing we're seeing is younger people getting into the industry," Gebhards said. "I think they're seeing the importance of diversifying through systems with local people or setting up contracts. Those are providing new opportunities in the business.

"It's just a matter that the stars are aligned for livestock production," Gebhards added. "If you can't do it now, it will never happen.

"IPPA also has done a really good job of being in touch with their members," Gebhards said. "When we started the membership program a few years ago, we had 400. Now there are over 1,000. Jim (Kaitschuk, IPPA executive director) deserves a lot of credit."

State Agriculture Director Chuck Hartke also thinks more farmers realize they need to diversify. He's pushed for increasing livestock production since becoming ag director three years ago.

"When you look at what's happened with the WTO (World Trade Organization) talks, the 2007 farm bill, subsidies and grain prices, the reality is farmers have to diversify," Hartke said. "The price of pork has given renewed interest in hog production."

He thinks there will be more interest in the future.

"I think you'll see in the 2007 farm bill more emphasis placed on the 'green box' - tying payments to buffer strips and pastures, crop rotation and legumes. To put that all together, people will have to look at livestock," Hartke said.

He was disappointed that Gov. Rod Blagojevich's livestock initiative was not passed by the legislature last year.

"It's dead at the moment, but livestock expansion is still one of our major goals. I'm a hog farmer, and I like livestock. I think it adds something to a community. One of every four jobs is directly or indirectly tied to agriculture," Hartke said.

"We're No. 4 in hog production - we used to be No. 1 in the nation. We're No. 26 in beef production, yet we have all kinds of pastureland. We now have more slaughter capacity than hogs produced here.

"We need to diversify. Livestock is necessary in this state. You can't just raise corn and soybeans anymore."

Source: State Journal Register

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