The U.S. pork industry is spending billions of dollars to build five new plants and expanding another existing plant in the Midwest. But that investment will pale in comparison to the money needed to supply those packing plants with pigs, according to Successful Farming. The five new plants alone will be capable of processing at least 40,000 hogs a day.
For an article titled “7 Things Every Pork Producer Should Know,” Successful Farming interviewed Mark Greenwood, senior vice president of Compeer Financial, a Farm Credit cooperative in Mankato, Minn. The article states that “it takes about $500 million to build a plant compared with $1.7 billion to build the production system to raise the pigs to supply the plant (not counting land).” With five new plants, those figures will add up.
The new plants will be located in Pleasant Hope, Mo. (processing 3,000 head per day); Windom, Minn., (5,000 head per day); Coldwater, Mich. (10,000 head in a single shift); Sioux City, Iowa (12,000 head, single shift ); and Eagle Grove, Iowa (10,000 head, single shift). An existing plant in Rantoul, Ill., is expanding.
The industry is also profitable, and producers are adding sows, but only 2.5 percent of all pigs are sold in the open market. The rest are sold on contract. Among other issues, strong global markets will be crucial, especially with the new plants coming online, Greenwood said — a cautionary statement given the heated trade rhetoric coming out of Washington these days.