Swine industry is 'critical'
WORTHINGTON -- More than $29 million dollars.
That's the estimated loss in equity in the swine industry in 2009 within Nobles County alone, according to James Dick of the Fairmont Veterinary Clinic, a featured speaker Thursday afternoon during the first day of the sixth annual Regional Bioscience Conference. Statewide, the corresponding figure balloons to $540 million in lost equity, he added.
"This is the largest equity erosion I've seen in this business," said Dick, who has been with the Fairmont clinic since 1972 and was the 1989 American Association of Swine Practitioners Practitioner of the Year. "Producers don't want to leave the industry, and many of them have got everything on the line."
The Regional Bioscience Conference, which continues this morning with on-site tours as well as additional sessions, is being hosted by Worthington Regional Economic Development Corp. Other sessions Thursday -- all at Minnesota West Community and Technical College -- pertained to renewable energy, new technologies and ventures and the basic science behind biobusiness.
Dick was to have been joined in his session by Gene Hugoson, commissioner of the Minnesota Department of Agriculture, but Hugoson was unable to attend at the last minute. For Dick, attending the Bioscience Conference was a homecoming of sorts.
"This is where I went to school, in 1967 and 1968," he said. "According to the financial records that I kept, $987 bought me a year of school, room and board. The two years here at Worthington got me into veterinary school; thank you for that."
Dick explained that the swine industry today "is in flux" primarily due to evolving technology. He pointed out early on that a recent count indicates that there are 308,206,536 people in the U.S., with about 302 million of them meat eaters.
"There are 302 million people that are my boss," he said.
The swine industry is currently the sixth-largest business in the state of Minnesota, Dick stated. From 2000 to 2007, he said, the industry changed into an "era of specialization," which helped prompt a long run of profitability from 2004 to 2007. But in 2006, things began to change, with ethanol being a main reason.
"Ethanol's impact ... is that it's added to the cost of production," he said.
Dick also noted that swine producers' new ability to select genetics has led a pig production rate of 30 pigs per sow per year, "double the amount of pigs per sow earlier in my lifetime." Now, he added, the average cost of production has shot up to between $136 and $140 per head, resulting in a loss of about $24 per head. That's where the Nobles County loss of $29.4 million in equity results, he said.
"We have people hanging on by a thread, and they're good producers," Dick said. "The survivors still have working capital ... but financial reporting has become much more needed and a major player in this industry. In the '70s, most of the records I had came out of a shoebox. That's changed, and if you don't have them (records), your access to be able to work with a lender will be extremely limited."
The "swine flu" labeling also had a negative impact on the industry, Dick said. While there is some light at the end of the tunnel in terms of futures prices, he added, the potential effect of corn mold could cause problems.
To turn the swine industry around, Dick discourages new construction until profitability returns. Additionally, he proposes changing a current 50-cents-per-gallon ethanol stimulus "to a domestic use stimulus with the same trends," and says we should stop looking for volatile foreign markets.
"We are the leaders of the world, why do they do what we do?" he asked rhetorically.
Dick also suggested that "we listen more closely to the 309 million meat-eating consumers. ... We need to start listening to who we really work for."
The veterinarian also said he was concerned about some of the long-term nutritional aspects of pork production.
"I think just like a plant, that we can kill with too little water and too much water, many of the things we're dealing with in human health are related to too much and too much little," he said. "I think the nutritional component to the science is an extremely important part. I worry about pork production today ... and if we're changing the balances of Omega 3 and Omega 6 (that hogs are fed), are we going to affect human health."
"The livestock industry today, especially the swine and dairy, needs your support and understanding," he continued. "We are at a critical time and locally, within our communities, especially in southern Minnesota, where there are a lot of pigs ... it affects a lot of people."
During a question-and-answer period that followed Dick's presentation, a conference attendee asked if Dick was worried about PETA (People for the Ethical Treatment of Animals) and the long-term effects its powerful lobbying and publicity tactics may have on the swine industry.
"There are 2 million people (PETA members) who are selling fear," Dick said. "It's a business, and it's a very profitable business for them. We need the 302 million (meat eaters) to become verbal ... and we need the message to get out that what we're doing is really in the best interests of the animals."