MASON CITY — Experts say Prestage Farms will be able to find enough pigs to supply a proposed $240 million slaughterhouse in Mason City without causing a hog confinement building boom.
However, no one was eager to predict how many confinement operations might be built in the region due to market forces in the years to come.
The North Carolina-based Prestage estimates it will need to source 4,000 hogs per day, ideally from independent producers, in order to meet the plant’s 10,000-hog per day capacity when it opens in 2018. It intends to supply the first 6,000 hogs per day through its own existing facilities.
Officials in the Iowa pork industry say the state and region’s hog farmers can meet that demand already without having to build additional hog confinements.
“The simple answer is yes, we have enough pigs” for existing and proposed packing plants, said Iowa Pork Producers Association Consumer Outreach Director Shawnie Wagner. “Our pig numbers right now are so large we have a surplus of hogs.”
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Cold hard cash
Whether the region’s independent farmers choose to send their hogs to Prestage instead of the packinghouses they are currently using or some other plant will come down to cold hard cash, says longtime Garner hog farmer Jamie Schmidt.
“You tell me how much they’re going to pay and I’ll tell you how many hogs they’re going to get,” said Schmidt.
Concerns about where the hogs are going to come from and how many confinement operations might be built to meet the demand were raised frequently during local public meetings about the proposed Prestage plant.
It was among the chief concerns during a packed five-hour Mason City Council meeting Tuesday.
Prestage believes it can source many of the hogs it will need from producers within 75 miles of the plant, but also plans to purchase from farmers outside the area, said Prestage Farms spokeswoman Summer Lanier.
According to the 2012 United States Department of Agriculture Ag Census, the most recent available, 11.6 million hogs were marketed in counties within 75 miles of Mason City in 2012.
Go just one more county beyond that radius and the number jumps to almost 26 million hogs sold in 2012.
“Today, hogs in Iowa travel hundreds of miles to processing facilities and this facility will be no different,” Lanier said in an email. “We prefer, for disease purposes, to diversify the geographic locations of the source of our animals. That, along with transportation costs and local market conditions, will determine how we source the hogs for this plant.
“Farms within 75 miles may have an advantage, but will not be the only hogs that we purchase,” she said. “There is absolutely no plans to concentrate feeding facilities within a 75-mile radius.”
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Record numbers
As of March 1, the nation's hog producers reported 67.6 million pigs in the first quarter of the year, according to the USDA.
That's the largest first quarter number ever and a 0.4 percent increase from the same quarter in 2015, according to Iowa State University’s April 2016 Iowa Farm Outlook.
Iowa ranks as the No. 1 hog-producing state in the nation, with 20.2 million head in the first quarter of 2016, followed by North Carolina and Minnesota.
Although pig numbers are up nationally for the quarter, Iowa's hog numbers fell from the same time last year. However, Wagner said he expects Iowa's hog numbers to remain strong because of increased biosecurity measures, litter sizes, production efficiencies and ongoing industry growth.
Iowa State University Assistant Economics Professor Lee Schulz said the trend has been moving toward a need for increased slaughtering capacity. In addition, USDA is expecting pork production to increase 8 percent in the next five years and 13 percent in the next 10, he said.
That’s being driven by domestic and international demand, the latter which results in exports of 26 percent of the pork currently produced.
The plant in Mason City and other new plants will help meet the growing need for additional slaughter capacity in the region, Schulz said.
And in the future ...
How many additional hog confinement facilities will be built or expanded after the plants open will be determined by supply and demand, as well as other market forces, he said.
“I think that initially as these plants come online, it’s going to be filling kind of the current need for the additional capacity,” Schulz said. “How many additional finishing facilities and where they are located, that really isn’t determined at this time.”
Prestage plans to build 10 more permitted confinement operations, but there are no plans at this time to build in Cerro Gordo County, company officials have said.
“If in the future we did build, these sites would be appropriately located according to state law and good common sense,” said Prestage spokeswoman Lanier. “We have no plans to build in the Clear Lake watershed or interfere with tourism in the Clear Lake community.”
At a Clear Lake City Council meeting, Prestage Foods of Iowa Chief Operations Officer Jere Null said the company would discourage anyone it was working with from building in the lake watershed.
Lanier said, “At this point in time, we cannot put a figure on how many of the hogs we process each day will come from within Cerro Gordo County.
“Of the hogs that we process each day, since we do not have any hogs of our own in Cerro Gordo County, we would hope to have the opportunity to purchase hogs that are already in the county from independent producers,” she said.
