Worst of times: A tale of two animals

Rik Dalvit/For the Capital Press

Editorial

In farm country, perhaps no two animals are more different than a dairy cow and a hog.

Yet their owners find themselves in strikingly similar circumstances these days. For many dairy farmers and pork producers, an accurate description of their circumstances is "dire."

Milk and pork prices have been in a freefall much of this year. Average net dairy farm incomes have plunged 94 percent, from $152,000 in 2008 to $9,200 this year, according to the USDA Economic Research Service.

Pork producers have seen similar reductions in their income, thanks to dramatically lower prices.

Though slight rebounds have been seen in recent months, the cost of production for both dairy and pork producers is still well above the market price.

Other similarities:

* Foreign trade has ebbed. Trade has been the key ingredient to healthy dairy and pork industries. When the world economy tanked last year, so did trade. As feed prices peaked, the export market and domestic demand both dropped, according to the research service.

Pork has encountered a double-whammy. When the H1N1 flu was discovered in the Mexico last spring, health officials gave it the unfortunate moniker "swine" flu. This, in turn, prompted protectionist officials in growing markets such as Russia and China to close their doors to U.S. pork. As a result, August pork exports were 18 percent lower than the previous year, according to the research service.

* Facilities are specialized and cannot be easily converted to other purposes. The modern hog farm -- and the modern dairy farm -- represent a highly efficient means of farming. The downside, though, is that the expensive facilities cannot be easily adapted to other livestock.

* For the most part, the problems dairy and pork producers face are not of their making. Weak world and domestic economies and a misnamed flu virus could not have been forecast.

One bright spot is that feed prices have retreated this year. Unfortunately, many dairy and pork producers continue to have to dip into their equity to buy feed because prices are still below the break-even level.

Both industries have tried to correct their problems, with limited success. The Cooperatives Working Together herd buyouts have leveled off the number of dairy cows, and the inventory of breeding animals in the pork industry is down 3 percent from last year, according to the research service.

In the meantime, Congress has been asked to help. Maybe some of those multi-million-dollar Wall Street bailout bonuses can be diverted to helping America's farmers.

However, the answer to this array of problems will take a lot more than the Washington, D.C., crowd has to offer. It will take continued efforts at the industry level, too.

Yes, Congress can and should intervene to inject more "real world" numbers into the prices producers receive, including the cost of production. And, yes, they need to find ways to help producers stay afloat until these uncertain economic times pass.

But more than anything else, for dairy and pork producers to get back on their feet it will take time -- and a worldwide economic recovery.

Unfortunately, that's something Congress does not control.

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