Bron Scherer, CEO of a Minnesota pork producer, explains how COVID plant closures created a crisis. Two major packing plants shut down in April, cutting daily harvests from 490,000 pigs to 330,000. Farmers began euthanizing market-ready animals with nowhere to sell them, roughly 1,500 in one week.
On the line is Bron Scherer, S-C-H-E-R-E-R, founder and CEO of Protein Sources. That's in Northfield, Minnesota. Protein Sources provides production and financial management services for farrowing, a new word in my vocabulary, and grow-finish swine operations in the Upper Midwest. In other words, operations that provide people with pork products. Is that correct?
Yeah, good afternoon, Dennis Prager. This is Bron Shearer. I'm a CPA but also a pork producer. And as you checked out on our website for Protein Sources, we are a company that helps independent family farmers manage and produce pigs for the food chain. And we're based here in southern Minnesota, actually in Mapleton, Minnesota. I live in Northfield, just outside of the Twin Cities. And I'll try to— I think the thing that we're lacking, and this is true at the government level as well as the general public, we are such a small minority as agricultural producers in this country and livestock in particular. There's just a very, very large gap in terms of the knowledge level, in terms of what it takes to produce food for Americans and for the world. And that's what scares me in terms of what's going on here with the virus and how it's affected— not the virus, but as you so rightly say, outweigh the effect of the, what we're trying to do, quote unquote, fight the virus.
Yeah, so tell me, what are you afraid of?
We are afraid that, and I guess it didn't become apparent to us, and I, in the middle of March when the virus first percolated, I sent a text message to my fellow partners. I said, the thing that worries me the most, it's not about our own employees, we'll take the precautions that are necessary, and in fact we have hundreds of employees and none of them have tested positive for the virus. Or have it apparently. But I said, what happens if our packing plants go down? And that's exactly what's happened. We've had in southern Minnesota here, we have two major packing plants, one in Sioux Falls and one in South Dakota and one in Worthington, Minnesota. The Sioux Falls plant's been closed since April 11th. And just to give your listeners a feel for how big the industry is and what this means, typically about 490,000 pigs are harvested in the United States every day. Right now we're at about 330,000, so a significant decrease due to these packing plants that are closed. And in our area here with these two major plants closed, I've got producers and I again produce pigs ourselves, we're in the position of having no place to sell the pigs. And it's not, a pig is not like a cow. A cow can go out to the pasture, yeah, they may get too fat for market, but at least there's that option. In the pig system, pig from start to finish takes about 11 months from conception until market. And there are more pigs coming and a pig is going to get too big very quickly for market. And we are forced to— the euphemism is depopulate, but we are starting to euthanize pigs. Our group started euthanizing pigs last week, about 1,500 pigs. We're going to euthanize at least that many this week. And obviously with this dearth of of packing capacity out of commission, um, it's a problem not only for our independent farmers, both financially, emotionally, and mentally having to do this on the farm, uh, but it's going to obviously affect the protein supply in the United States in a significant way.
Okay. The thing I don't understand is even though restaurants are closed, Americans are eating the same amount of food, or am I wrong?
They are. And I think the thing that you need to remember is that from a pork perspective, there is probably in the chain maybe 72 to 96 hours of fresh meat available. So in our prices in the pork, and now prices have come back since COVID started 6 or 5 or 6 weeks ago, but what really hurt them is still hurting the industry is the food service side where where the bacon, ribs, hams, that type of thing that's served in restaurants and fast food and other types of food service, that has gone away. But so far, people have been eating normally, but when these plants continue to be closed day after day, week after week, it won't be long—
Oh, so the issue is not demand, the issue is closure of plants.
Supply, that's correct.
Okay, so hold on please, I gotta take a break. Ron Sherer is my guest in Minnesota.
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