By Patti Drapala
MSU Ag Communications

MISSISSIPPI STATE -- Fuel, feed and packers have Mississippi pork producers over a barrel.

According to statistics from the National Pork Board, Mississippi's hog production numbers over the last seven years (2000-2006) averaged about 470,000 head, which includes market hogs, feeder pigs and sows. But from 2005 through 2007, the average was about 434,000 head. Production at the end of 2007 totaled 412,000 hogs valued at $63 million.

The industry is in transition and will have to do what it has done for the past 20 years to survive – reinvent itself, said Mark Crenshaw, Mississippi State University Extension swine specialist. Survival in the aftermath of the Bryan Foods plant closing in West Point in March 2007 makes the task much more difficult this time around for Mississippi producers.

“High fuel and feed costs have made 2008 pretty rough for the state's swine industry, but the loss of the market that Bryan provided has created an additional hardship,” Crenshaw said. “The closing came at a time when producers in general were struggling because of the economy.”

Swine feed in general contains 70 percent corn, 20 percent soybean meal and 10 percent other nutrients. While higher corn and soybean prices made feed prices rise, the cost of fuel has had the biggest impact on the industry.

The drive to the Bryan processing plant in northeast Mississippi was reasonably short for most hog operations. Market hogs now have to be hauled greater distances to markets out of state, which requires more diesel, time and labor.

“If you factor in fuel costs, you can understand why hog producers are being squeezed,” said Extension agricultural economist John Anderson. “There's no sign that either fuel or feed costs are going to let up significantly in the near future.”

The loss of one packing plant also has affected the economies of scale, or cost advantages a firm obtains when production expands, for pork operations as far away as Texas and Georgia.

“The industry is still making adjustments in strategies to secure markets and fulfill contracts that were made prior to the closure of Bryan Foods,” Crenshaw said. “The obligation of the contract doesn't disappear along with the plant.”

Sara Lee, the owner of Bryan Foods, has made an effort to fulfill contract obligations with companies and their growers when the Bryan plant was operating, Crenshaw said. Many of these contracts will not expire for another two to three years.

Prestage Farms, one of the largest hog and poultry producers in the southeastern United States, has begun examining scale-back options once its contract with Sara Lee expires, said Terry Emerson, general manager of Prestage's Mississippi division.

One option is to continue to produce and ship hogs out of state, he said.

Prestage's other choices are to revamp their operation in Mississippi either by producing genetic replacements to improve herd health or by breeding piglets that are shipped after weaning.

“With no local packing plant, there is nowhere convenient for the end-product to go,” he said. “Expansion is not a possibility for us.”

Independent hog producers who sold hogs to Bryan or had other markets, such as selling pigs for show purposes, are scaling back, pooling resources or getting out of the business.

“If you can only get $10 a head for 35-pound feeder pigs, you're not covering costs and not making any money,” said James Hogue of Clinton, an independent producer who raised feeder pigs for the 4-H show market.

One advantage the swine industry has in its favor is the willingness of the participants to adapt to changes in the philosophies that drive production and marketing systems, environmental regulation, animal welfare and consumer behavior.

“Our producers are innovative because they have had to be,” Crenshaw said. “They will find solutions by asking the right questions and acting upon that information.”