Farmscape for July 21, 2020

An economist with Kerns and Associates says processing plant disruptions caused by COVID-19 have resulted in the worst financial disaster ever for American hog farmers.
As part of a news briefing yesterday, the National Pork Producers Council outlined the economic devastation caused to pork producers by COVID-19 and urged Congress to act swiftly to preserve their livelihoods.
Dr. Steve Meyer, an economist with Kerns and Associates, says the value of U.S. pigs produced this year has taken a dramatic hit since the advent of COVID in February.

Clip-Dr. Steve Meyer-Kerns and Associates:
If we look at what this year's production was worth back on March 1st, as far as what the futures market said the producers could expect on pricing through the end of 2020 and we compare that to the July 10th, the difference is about 4.7 billion dollars.
Producers haven't lost that much money yet but relative to where they were going to be, by the end of the year they're going to be about 4.7 billion dollars short.
In addition producers have had to euthanize a number of animals.
There's no way that producers want to do this.
It's the last thing they want to do and that factor right there is one of the reasons it looks like things are better now but they aren't.
Producers have done everything they can to avoid euthanizing pigs.
They put them on diets that meet their nutritional needs but don't provide the energy and protein for growth in order to hold the pigs to keep them from getting too heavy.
In so doing, they've backed up supplies of pigs in their other barns on their farms all across the United States.
We think that there's two million plus pigs that were backed up as of June 1st and the reason that those haven't been slaughtered is that we just don't have the slaughter capacity to do it.

Dr. Meyer acknowledges plant capacity has recovered dramatically since May when it was down by about 40 percent to where that reduction is now hovering around five percent.
He suspects that five percent reduction will be permanent though, as the result of compliance with social distancing guidelines.
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Bruce Cochrane.

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