Finding a niche: When fewer pigs means more
Several decades ago, 60,000 hog farms of varying sizes were scattered across Iowa. But since 1978, the number of hog farms has decreased by 86 percent — even as the number of pigs raised in the state has gone up slightly.
The consolidation has made for less expensive meat, but for hog farmers, it’s meant making choices.
“As new technologies (were) adopted it drove down cost of production,” said John Lawrence, an agriculture economist and vice president of Iowa State University’s Extension and Outreach. He said previously, if a farmer had a hog barn and put in his own labor, he used to make “maybe $50 a head, and so if I raised a thousand hogs that was pretty good money. Well, when that got down to like $10 a head, 1,000 hogs didn’t go very far.”
Many hog farmers faced a choice – get bigger or get out.
But some, like Ed Geest, took a third route.
Big shift for the hog industry
- Three decades ago, the average Iowa pig farm had about 250 pigs. In 2002, the average Iowa pig farm had more than 1,500 pigs. According to the latest national agriculture census, more than 1,000 farms in the nation have more than 5,000 hog
- Iowa’s pig marketing infrastructure has changed rapidly. Buying stations, where farmers can get a bid and sell their hogs, have decreased markedly. In 1987, there were 253 hog buying stations in Iowa. In 2005, there were 44 buying stations.
- With more pigs being raised under contract, most farmers don’t own the animals. This shields the farmer from risk of market swings, but it also means that the profit or losses are captured by the company.
- With the rise of industrial pig farms, hogs have become viewed much more negatively. An ISU Rural Life Poll in 2004 found that when rural Iowa residents ranked hog confinements below prisons, solid waste landfills, slaughter plants, and sewage treatment plants as desirable rural development.
Geest’s hog barn sits among a hodgepodge of outbuildings behindhis family’s home near Blue Grass, Iowa. Inside on windy fall day, the air was thick with the stinging smell of hogs. Resting in the pens were two mama sows surrounded by about seven wiggling piglets.
“It’s a different kind of pig,” said Geest, “It’s not the other white meat. They’ve got more fat in the meat, and it just tastes better I hope.”
Geest used to raise about 2,500 hogs in a confinement system. But he didn’t really like the taste of the ultra-lean hogs, which were fetching higher prices, and he didn’t want to grow his farm any bigger. In the late 1990s hog prices hit rock bottom:
“The price of hogs one year got down to 8 cents a pound, and I’d walk into grocery store and prices had never dropped, but I figured out then where the profit was in hog production. It was actually selling to people.”
So gradually, that’s just what Geest started doing. He returned to raising Berkshire pigs, which he used to raise as a kid in 4H. They’re more of a specialty product. Their skin is mottled with black, and their meat contains more intramuscular fat, making it juicier. Geest started marketing the meat directly to consumers by selling at the Davenport farmers market.
“I think it’s important for people to know where food comes from. They can talk to who produces it, and if they have questions they can ask how it’s raised,” he said.
Geest practices no-till to preserve the soil, and uses very little pesticides because he rotates his crops.
“Then you feed crops to pigs, and the pigs fertilize fields. It’s a whole program, it isn’t just one thing,” he said.
Geest sells the meat for a bit more than customers would pay for pork in the grocery store.
Lawrence, at Iowa State, said the challenge for farmers is reaching their customers. Those who want to tap into rising demand for local food have to do much more than just raise the animals.
“Every function from inputs to consumers still has to exist. Somebody has to process it, somebody has to distribute it, somebody has to finance it,” Lawrence said. “So we always say we’re going to cut out middleman, but somebody has to perform that function.”
Geest and his family have managed to be the farmer and the middleman. His white van has four freezers bolted inside. The side is emblazoned with the brushstroke logo of a hog’s head that his daughter designed, and the back folds out to be a sales counter.
To the Geest family, it’s not just business.
“It’s kind of like what the old butcher shop was,” Geest said. “People come in, and ‘Oh, how is your day, Misses So and So, how are your kids?’ You keep track of all this stuff.”
Experts in the niche pork market estimate that about 3,000 hog farmers across the nation are targeting these specialized markets. For those selling at farmers markets it often isn’t their sole income. Because the risk, of course, with selling directly to consumers is that in a bad economy, some people cut back.
And the larger pork industry is interested in these markets, too.
Gary Huber, coordinator of the Pork Niche Market Working Group, said he has seen the industry start selling some lines of “natural” pork or pork raised without antibiotics or raised on vegetarian feed.
“When somebody finds something special and a niche, there are other people that will look at that and say ‘hey there’s better margins there, so let’s see if can do what they’re doing,’ “ he said.
So how does a farmer stay ahead of the curve?
“The key is if you’re in that niche, you have to constantly innovate in ways that build on your strengths to maintain that differentiation,” Huber said.
And one niche that’s much harder for industry to get in on is being from the community — being local.