North Carolina's $2B hog industry belted as farms fail - Triangle Business Journal:

http://thelondonbiker.com/blog/about/
Two culprits – overly large herds and rising costs due to higherf grainprices – have been shrinkinhg the bottom lines at many hog operationxs in North Carolina, the nation’s seconr largest hog-producing state, behind only Iowa. To those factorw can be added the recentswine flu, or H1N1 flu, the effects of which the industryh is only starting to tally up. “w lot of people have just not realized what’zs been going on in the industry,” says Deborahg Johnson, CEO of the , an industrg trade group. Already, she says, “We are beginninf to see some (hog farmers) leave the industry due to financia hardship.
” At three eastern North Carolinw operations, relief from the pressurs will come from Chapter 11 or Chapter 12 reorganization. Chapter 12 is a provision written into the federal bankruptcy code in 1986 dealingy exclusively with family Both Chapter 11 and Chapter 12 allow a company breathin room to attempta reorganization. In their reorganization Bunting Swine Farms of Wilsob listed assets of justunde $1 million and debts of $12.4 Perfect Pig of Newton Grove in Sampson County listed assets of $9.
3 million and debtd of $23 million; and of Enfield listed assets and debt s in the $1 million to $10 million All three are consideres mid-level operations, producing between 100,000 and 200,000 hogs a North Carolina farmers raise about 10 million hogs a year for Some farmers are independent, taking thei r product directly to the market. Other farmers operat e under contract with one of the majorpork producers, such as Virginia-basede , which in the past has had contracta with more than 1,000 North Carolinsa farms. Another prominent producer is , which has had dealsa with as many as 150 NorthCarolinq farms.
Recent developments at publicly tradede Smithfield Foodsillustrate what’s ailing the industry. The meat-producing in a recent U.S. Securitiews and Exchange Commission reported lossesof $112 million for the nine monthsw ending Feb.1, 2009, explaining that its costs per hundrerd weight of hog had risen from $49 to $62, largely due to highere grain prices. The company attributes the rise in grain coststo “the United States’ ‘corn to policy.” Meanwhile, as costs were climbing, the Smithfield managersz say, the market was glutted because a record numbera of hogs were slaughtered in 2008 and into 2009.
Demandf for pork at the grocery store has been flat inrecent months. New retail numbers will begin to tell the effectw of theH1N1 scare. While a final determination has not been the blame for the flu outbreak is beinhg laid to hog farmsby some. In response to market Smithfield has been closing someproduction plants, includinv one in Elon near Burlington, and shaving 1,80p0 employees companywide. “The whole industry is feeling pressure,” says Dr. Todd See of Lookinh down the road, grain price s have started to moderate in recenytweeks and, Johnson says, the latestg North Carolina herd is expected to be 3 percentt smaller than last year’s.
Nationwide, the movement towarxd smaller herds might be even more pronouncedc thanNorth Carolina’s 3 percent, says Christine McCracken, an analyst with Cleveland Research Co. “A lot of these (hog have been losing moneh for18 months,” she says. “Ande that’s a long