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DAVID KRUSE

By Staff | Jun 27, 2014

A recent Des Moines Sunday Register brought the hog-lot issue back to its front page to rehash what is a settled issue from a regulatory standpoint.

Citing of livestock issues created controversy that resulted in the current regulatory system that there is no political appetite to go back and revisit.

Some who live in the rural countryside are often surprised that a farmer can build new hog barns within a half-mile of them, but that is what it is.

Most of Iowa is farmland which includes livestock production and if you want to live in the country then you accept that.

I have lived on farms that produced both hogs in confinement and cattle in lots and it is part of the ambiance of country living.

I scooped and spread a lot of manure. There are going to be hogs on farms housed in the type of facilities that are the most efficient for the living environment of the hogs so they become pork in the most efficient manner possible.

Hogs produce manure which has become an important component of a sustainable production system providing the necessary nutrients to the crops that become the feed for the hogs.

Hog manure is pungent, but is being managed by the industry in a responsible manner that limits the exposure to the elements in the most productive manner for crop production.

The state requires manure management plans and applicator certification. There are spills, but they are isolated accidents for which producers are held responsible.

The hog industry has restructured over the last two decades into an integrated production system, where few hog producers own hogs produced for a commodity market.

Most farmers building new facilities today are contract producers who put buildings up and receive payments from hog companies either owned by packers or integrated with them.

They do not own the hogs. They are only indirectly connected to the pork industry today.

The farmers get paid for pig spaces, essentially managing real estate investments with the added attractive bonus of receiving the manure to use on their farmland to replace commercial fertilizer.

Yeah, that’s organic. It is kind of amazing that most organic foodies don’t even know their food is produced with animal poop which is part of their naivety.

They perceive organic as something good, but really don’t know from where it comes.

Given this structure we are seeing small hog farms bury old buildings as new 2,500-head finishing barns are built. There could be two or more of these barns per section.

The 2012 USDA hog census showed that the number of hog barns in Iowa declined by 24.8 percent from 2007-2012 even as the number of hogs increased 6 percent.

Global pork demand is forecast to see significant growth and the U.S. Midwest has the inputs necessary for the most efficient pork production in the world.

That is why the World Pork Expo is held in Des Moines and attended by producers from all over the world. Iowa is the epicenter of that with 20 million hogs, many times the state’s 3 million-plus human population.

An Elanco study released at the Pork Congress forecast that global demand for pork will increase 50 percent by 2050. That doesn’t mean that Iowa will see a 50 percent increase in hog production requiring a proliferation of new barns.

Much of the increase will come from productivity. Elanco calculates that this increase in pork demand can be met by adding 9 pounds per head to carcass weights and boosting gains enough to reduce production time by three weeks. Elanco sees this as doable.

The epicenter of pork demand is China.

According to USDA, China’s pork imports are likely to increase from 750,000 metric tons last year to 1.2 million metric tons by 2023.

Over the past 30 years there have been 1 billion people in China that made the transition from peasant to consumer in terms of income which allowed them to add meat protein to their diet.

Another 200 million Chinese are forecast to enter the middle class by 2026. The Chinese are adding $2 trillion to bank accounts each year so are experiencing the growth in wealth necessary to have the financial capability to determine their diets. They demand meat.

The state of Iowa just signed a special trade agreement with China, because they know how important the state is to their ability to support the diet the Chinese population demands.

When a new 2,500-head hog barn goes up in the neighborhood, it is a tree in the forest.

It is being built in context of supporting global food security, improving diets connecting to the global economy. It is what we in agriculture do.

Our state government understands that. It is the mission of agriculture.

It comes with the territory in rural farm areas where all have to seek accommodation with one another.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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