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Low prices are hurting local pork producers

January 21, 1999

Hog farmsBy JULIE E. GREENE / Staff Writer

photo: JOE CROCETTA / staff photographer




WAYNESBORO, Pa. - After almost 30 years in the business, Max Hade doesn't know whether he'll be able to continue hog farming.

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Hade, like several other hog farmers in the Tri-State area, has taken steps to sustain the farm - his main livelihood - in the face of what some farmers say are the lowest hog prices in almost 60 years.

"I'm losing money on every hog I sell," said Hade, of 4179 Clay Hill Road in Waynesboro.

His savings are almost depleted, his wife got a job with Franklin County Public Works last September and he had to cut the pay of his youngest son, who recently got a second job, off the farm.

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Hade, who has been a full-time farmer since 1983, said he, too, might have to get another job.

"This money we're losing, we'll never get it back. It'll be years getting over this and some will go into bankruptcy," he said.

Hade, who has about 700 hogs now, said he's seen prices as low as 4 cents a pound since hog prices started dropping around November 1997. He once saw a sow sell for half a cent a pound, but it wasn't the best sow, he said. Last week he was getting around 17 cents per pound for a hog.

The break-even price for some bigger operations is around 40 cents a pound, but Hade said he can make money in the low 30s because he doesn't have as much overhead and makes his own feed.

Supply and demand

The depressed Asian economy, the closing of three major slaughterhouses and the flood of hogs into the United States from Canada, where employees of a large slaughterhouse are on strike, were the major reasons farmers gave for low prices.

It's all about supply and demand. There is a glut of hogs on the market right now and slaughterhouses can't keep up with the supply, farmers said.

On the other end, the demand for pork has declined along the Pacific Rim, a major importer of U.S. pork, farmers said.

The federal government has taken steps to help hog farmers, but some are concerned it might be too little too late.

The government is sending a food aid package to Russia that includes 50,000 metric tons of pork, said Andy Solomon, spokesman for the U.S. Department of Agriculture.

Earlier this month Vice President Al Gore announced the Agriculture Department would give $50 million to struggling independent hog farmers.

Farmers can sign up for the aid between Feb. 1 and Feb. 12, Solomon said. There is a $2,500 cap per farmer.

Mike Cushwa said he plans to sign up for the aid, but it would only make a dent in the roughly $80,000 he's lost so far because of low prices.

Cushwa, 47, said he was lucky enough to have 40 beef cattle he could sell to support his hog farm near Hedgesville, W.Va., although he sold the cattle for less than their value.

He's restructured a loan and cashed in his life insurance and his wife and son have gotten jobs off the farm in recent months.

"I'm going to fight it out just for the sake of the family farms. I'm just not one to give in to the big corporations," Cushwa said.

The federal aid is a short-term fix. What family farmers need is long-term security, said Steve Teufel, 39, who has put his southern Berkeley County, W.Va., farm up for sale.

After more than 14 years of hog farming, Teufel decided last spring - as hog prices continued to spiral - to get out of the business. At first he adapted his farm from market hogs to feeder pigs, which take less time to raise.

"If you can't make a living at it, you have to get out of it," Teufel said.

Teufel, who took a job with the Federal Emergency Management Agency in Virginia, only has about 30 pigs left, and plans to sell those in the coming weeks.

"I don't have any intentions to get back into it," Teufel said. Hog farming is no longer a reliable, steady source of income, he said.

No relief for shoppers

Some farmers say they're starting to see hog prices rebound slightly, but are still upset over retail prices.

Lorraine Seal, 50, of Williamsport, said she hasn't bought pork lately because prices are too high.

"I think they could bring it down more," said Seal, standing in front of the pork section at Weis Market on Maryland Avenue in Hagerstown on Tuesday.

Weis was charging $2.69 per pound for center cut pork chops and $2.89 per pound for the more thinly cut chops.

Weis spokesman Dennis Curtin said the grocery store chain's pork prices have come down somewhat, but not enough to match the decline in hog prices.

"We are purchasing from processors and manufacturers and we are dependent on the price they charge," Curtin said.

Other factors included in the shelf price are utility costs, rent, taxes and most notably wages and benefits, which have risen, he said.

Bob Holsinger, owner of Holsinger's Meat Market in Maugansville, said his pork prices have been reduced proportionately to his lower costs. He too must pay the middle man who slaughters the hogs.

Holsinger said his retail price for a center cut has dropped from $2.99 per pound a year ago to $1.50 per pound.

'Teach us patience'

Whether it's the retailer or the processor, someone is making a lot of money, said Gerald Ditto, president of the Washington County Farm Bureau.

"It's going to be a difficult year to survive," said Ditto, who has been a hog farmer since 1978.

"You have to really want to raise hogs to stay in the business right now because you're losing money," said Ditto, of Clear Spring.

Hade, in Waynesboro, said he's going to ride it out and see how things go. Recent rain allowed him to barely escape the major expense of having to drill a new well.

"The Lord, he's taken care of us before, so I guess He'll help us out this time too ... Maybe it's just a test to teach us patience," Hade said.

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