Growers anticipate post-Sara Lee future
by For the MBJ
Published: March 26,2007
Sugar-cured ham has served as a tasty centerpiece on many a Magnolia State dinner table. Millions of Mississippi breakfasts have been made better by sizzling bacon.
Many of the pigs supplying those meals are themselves supplied by Mississippi hog farmers who sold their livestock to Sara Lee Corporation’s facility, founded as Bryan Bros. in West Point in the early 20th century.
That plant will close March 30, with slaughter and processing of nearly 10,000 animals weekly coming to an end several days before that. The much-publicized end of 1,200 jobs at the plant itself overshadows the potential loss of hundreds more jobs and, in extreme cases, catastrophic asset and property loss elsewhere in pork production.
“I owe $400,000 on these two farms,” said Charles R. “Bob” Power, who grows out hogs with his sons Bill and Tom on two farms near Ackerman. Power got into the business 11 years ago.
The business for growers like the Power family generally entails raising pigs for North Carolina-based Prestage Farms. Privately-held Prestage contracts to supply hogs to Sara Lee. Its contract growers fall into two categories, according to Mark Crenshaw, Mississippi State University (MSU) Extension Service swine specialist and director of Mississippi Pork Producers.
Crenshaw explained that “nursery” growers in Mississippi, Alabama and Tennessee receive weaned pigs weighing approximately 15 pounds and grow them to 50 pounds. Then they’re shipped to “finisher” growers who raise the pigs to around 260 pounds, with the next stop the slaughterhouse.
“Short-term, they are going to ship pigs to other markets,” related Crenshaw, adding there are 1,000 farms raising pigs in small- to large-scale undertakings in the state.
Mississippi counts approximately 20 custom slaughterhouses that Crenshaw feels won’t be in the market for the thousands of pigs produced by the 60-plus growers that currently supply Sara Lee.
The next closest large hog processor is Swift & Co. in Louisville, Ky., which Crenshaw said, along with large-scale processors in Missouri and North Carolina, is out of range for feasibly hauling the livestock.
Crenshaw reported the Bryan closure would adversely affect pork production — and ultimately consumer prices — in the entire region. “This is going to change swine production in the Southeast, not just Mississippi.”
With no hogs being raised and processed in Mississippi and surrounding states, processors filling the pork demand from outside the region will incur increased shipping costs.
Coupled with increasingly higher costs for corn, prime in the porcine diet, due to ramped up ethanol production, pork costs will likely rise.
These market anomalies have less effect on independent swine farmer J.E. Lewis of Quitman. He’s been in the business for more than 30 years and sold to Bryan “when the Bryan family still ran it” for a period back in the 1980s.
“I’m not tied to anyone,” said Lewis. “My markets are niche markets.” He sells “roaster” pigs of 50-100 pounds to Hattiesburg processor Boe Farms. Those pigs are “overall a large market” for whole-hog barbecues in cities like New Orleans, Atlanta and Houston.
Lewis sells 600-700 pigs per year for roasters, 4-H Junior Livestock Exhibition contest entries and breeding stock from the four breeds he maintains.
“I don’t expect any effect on my business in the short-term,” Lewis said of the potential shutdown of large-scale swine production in Mississippi. “The effects on the overall industry could be negative over time.
“And the consumer can expect to pay more for pork in the future.”
Contract growers like Power expect to be impacted soon. Prestage hasn’t shipped him nursery pigs since late February. He estimates he’ll be out of pigs early in April. (From breeding to when it’s large enough for slaughter takes approximately a year.)
In mid-March, Power still had his usual 7,000 hogs at his finishing barn. They are scheduled to be gone by mid-April. “Prestage says I’ll be out of pigs for about three weeks,” said Power.
Prestage, Power said he was promised, will send him more pigs but it will likely be considerably fewer than he’s accustomed to growing out. And, it is entirely possible that could change and he could be left with no pigs.
“Right now,” pointed out MSU’s Crenshaw, “there is not a good answer to any of these questions. There is no good economic reason to continue doing this.”
Power’s nearly half-million dollars of debt is sufficient incentive for him to continue in the hog-raising business if he can. The eight 40×180-foot buildings at his finishing farm are a “one-use deal,” not useable for any other purpose.
Sara Lee/Bryan’s closure, Power contends, goes back to the early 1990s, when contractor farms like his became the pork-producing business model. Within a year of starting his business, Power and other growers were hit with lawsuits from neighbors who wanted the odoriferous operations removed.
Bryan wanted to double its production but Prestage balked, said Power, because it could not be guaranteed there would be no more lawsuits filed (Power’s is going on still, more than a decade since filing).
“If they had been allowed to grow,” Power declared, “this would have been much different. Since Prestage couldn’t expand in Mississippi, Prestage bought into Iowa and is going wide open there.”
“In three months, some farmers will decide to get out, and others will decide at six months. But it takes a full year to close down,” predicted Crenshaw. “It’s going to be a case-by-case decision.”
Power hopes he won’t have to make that decision. A rumored purchase of the Bryan plant would provide reprieve. But that rumor could be founded in wishful thinking.
“I worry about things I have control of,” said Power. “I work at things I can control.”
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