Economics

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Author(s): Dale Miller
Publication Date: January 1, 2008
Reference: National Hog Farmer, June 15, 2008
Country: USA

Summary:

Norlin Gutz has been raising hogs for over 35 years. “I was buying pigs on the open market. Whenever my feed distributor had a finishing tloor come open, I would place the pigs, he would get the feed business and 1 could make a little money, That’s how I got started,” Gutz explains. In 2001, Gutz bought a 1,200-sow unit with a nursery and a house north of Albert Gity, IA. It had set empty for three years,” he notes. “Our costs were below the industry
average. Weaning averages were running at about 9.3 pigs/litter. Even when costs began escalating, our costs were
still below $34/pig. Our facility costs were very low,” he says. The situation took a bad turn in the summer of 2007, however, as Canadians began sending more pigs to the area and pig prices dropped to about $10. In late February, Gutz bad 12,000 pigs on feed on sites that were old and not very efficient, but they were all that was available.
In early March, the local banker that carried the loan asked Gutz to form a liquidation plan. He did. The last sows
farrowed the first week of lune. The unit closes down a month later. Worse yet, Gutz is trying to find positions for eight employees – all hired through the worker exchange program, Gommunicating for Agriculture. “I don’t know where the situation in the livestock business will lead. It has upset the whole structure of the industry. A year to 18 months down the road. I think there will be some terrible consequences for jobs that are related to the livestock industry — especially in Iowa where we are so tied to the livestock industry,” he says. “As for my future, we are still sorting that out. I doubt I will be involved with hogs. It would be hard to get involved again once your heart has been broken.”

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