November 7, 2001 | By: Laura Skillman
PRINCETON, Ky.

The state's swine industry has been a profitable one for farmers, with the notable exception of 1998. But markets have continued to dry up in recent years requiring producers to ship their stock further and further distances from the farm.

In the past 15 years, four pork-slaughtering facilities in the Kentucky area have closed, said Richard Coffey, Extension swine specialist at the University of Kentucky Research and Education Center in Princeton.

Today, about 90 percent of Kentucky's producers are sending their stock to plants in Louisville, Paducah, Logansport, Ind., Delphi, Ind., Beardstown, Ill., and even West Point, Miss.

Market access is a key issue to the survivability of the state's hog industry which saw huge numbers of farmers leave the business in the late 1990s. In the early 1990s, Kentucky had more than 5,000 farms that raised hogs. By 2000, that number was down to around 1,900.

The loss of markets was likely a key consideration that led many small producers to decide to get out of production, Coffey said. They had had fairly close access to markets, but now they don't.

"You are not going to load up a pick-up load and drive to West Point, Miss.," he said.

There are several options for farmers to consider to ensure they have market access.

One option is to contract with packers which can require a specific number of animals, usually a semi load, to be delivered at a set time and that meet certain quality standards.

A number of producers use production contracts with as many as 55 percent of the nation's hogs finished under a contractual agreement. Production contracts can allow for better access to capital, allow for expansion and reduce financial risk as well.

Another way to maintain markets are to join producer marketing cooperatives. This allows small to mid-sized producers to market their animals as a group ensuring they can meet the numbers a packer may want. The cooperatives can also be used to purchase inputs, potentially lowering costs.

Coffey said a cooperative is likely to be the best way for small and medium-sized producers to stay in business. There is one good example of a cooperative in Kentucky, near Bardstown, he said.

"What that let's them do is market semi loads," Coffey said. "They buy inputs together. It's a way for them to take advantage of what some of the larger guys do but still maintain their small size."

Other options would be to develop niche markets such as antibiotic-free pork, ethnic markets or others. Those markets are there and can be developed but it is not a simple task, he said.

And a final option would be for producers to own their own packing plant. That's a tough one to bite off, but there are some groups looking at it, he said.

Contact: 

Richard Coffey, (270) 365-7541