Pork producers are facing "very challenging times" with extraordinarily high costs of production costing producers 4-5% of their equity every month -- or, across the industry, $2 billion since last September -- according to Bryan Black, a pork producer from Canal Winchester, Ohio, and president of the National Pork Producers Council.
The economics are as threatening to producer survival as was the situation in 1998-99, he said in remarks to reporters at the opening of the World Pork Expo. However, he said the situation is not a consequence of overproduction and pricing wrecks, as it was 10 years ago, but because of high input costs, which he emphasized are due to several factors, including but not just the draw on corn for ethanol production. Prices have been, in fact, "especially resilient," he said.
He warned that, if the situation is not resolved, producers will need to cut back production "voluntarily or involuntarily," and this will increase pork prices significantly in 2009. "We are very concerned," he said, "and we want consumers to know that we are looking at all factors" to find solutions.
Black said the NPPC board of directors, meeting Wednesday, approved a "feed exploration task force" to look at one of those factors: feed costs. The task force will include economists, nutritionists and producers, and NPPC chief executive officer Neil Dierks said it will be focused on policy issues surrounding the availability of feed and all feasible feedstuffs, including incorporating distillers dried grains in hog rations.