Schulz: Hog industry in very challenging situation

April 15, 2020

Dr. Lee SchulzLee Schulz, associate professor, was interviewed for an April 14 Star Tribune story, "Sioux Falls plant closing is risk to pork supply, but plenty of others are open."

"That’s the challenge facing food processors around the country," said Lee Schulz, a livestock economist at Iowa State University.

“It’s unknown,” he said. “That’s part of the concern here. It’s so widespread and unknown, just all the implications. The hog industry under normal circumstances is a well-oiled machine. But when you do have these bottlenecks and backlogs, that becomes a very challenging situation, because there isn’t much flexibility.”

Gulf Times, April 14 story, "Thinning shelves."

“Biology prevents producers from instantly responding to price changes,” said Lee Schulz, a livestock economist at Iowa State University. “We don’t have the ability to slow down production.”

Radio Iowa, April 14 story, "Slow retail business and plant shutdowns could impact pork prices."

“Product can’t be quickly diverted from food service into the retail market, and that’s really the kink in the supply chain,” Schulz says. “Really, the impact here is the slowdown in slaughter is going to have an impact on the availability at the retail level.”

Schulz says pork producers will soon find themselves without much capacity as they are forced to hang on to their hogs that are ready for market, while newborn piglets recently weaned will be coming to finishing barns with no space available.

Story also covered by
Hays Post, April 14

Farm Journal's Pork, April 15 story, "COVID-19: It's Not a Repeat of the 1990s for Pig Farmers."

One of the biggest differences between the 1990s and COVID-19 is that the 1998 hog price wreck impacted the pork industry whereas COVID-19 is having a much broader and varied set of effects on U.S. and global economies, he says. This makes it harder to assess the multitude of different impacts that are occurring or could occur.

“Clearly, the uncertainty has not peaked yet and the best we can hope for, from a market perspective, is that there will come a time when it appears the worst is over and we can see a path to recovery in the markets. It seems unlikely that any definitive news is forthcoming, certainly not in the next few weeks, which would allow markets to bounce back with any confidence,” Schulz says.

Iowa Public Radio, April 15

But if producers have their hogs on site longer, their quality could decrease, said Lee Schulz, an Iowa State University Extension livestock economist.

“You could get lower prices because of price discounts for heavier carcasses or more fat on those animals,” Schulz said. Schulz said it’s also likely wholesale and retail prices could go up because of the limited availability of certain products.





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