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Eastern NC Reeling From Hog Farm Bankruptcies

Wed, 11/25/2009 - 5:09am

RALEIGH, N.C. (AP) — On a recent camping trip with his son's Cub Scout troop, Curtis Barwick ended a talk about his job managing contracts for the now-bankrupt Coharie Hog Farms with a desperate plea.

"I really don't care if you eat the sausage or not," Barwick told the scouts. "Just buy it."

North Carolina's hog industry needs all the customers it can get to bring it back, s Scouts included.

After two years of losses, Clinton-based Coharie and three smaller North Carolina pork producers recently declared bankruptcy, causing scores of grain and hog farmers to lose once-stable contracts to raise hogs.

Many hog farmers fear that other companies could go under or greatly reduce their contracts, further damaging the hog-dependent Eastern North Carolina economy.

The average cost of raising a hog is now $20 more than the hog is worth at sale, thanks to high grain prices and weak demand, said Don Butler, the president of the National Pork Producers Council, who works for Murphy-Brown, a Warsaw hog and turkey company.

"Everybody's bleeding out of this," said Jay Sullivan, a fourth-generation farmer with a 900-acre Sampson County farm raising hogs and growing grain. "We're going to need a little help."

Sullivan raised 3,000 hogs a year for Coharie, but will have empty barns in January unless he can find another hog company to replace what was 35 percent of his income.

North Carolina has the second-largest hog industry in the country. The $2.2 billion in 2008 cash receipts was 22 percent of all cash receipts from farming in the state, according to the state's Agriculture Department.

The industry's problems are complicated, with blame attributed to the net effect of high grain prices, less consumer demand for pork and the emergence this April of H1N1, also known as swine flu.

Several countries, including China and Russia, closed their borders to U.S. pork products despite assurances from U.S. health experts that the swine flu wasn't connected to meat consumption.

Coharie, based 60 miles southeast of Raleigh, was the latest and biggest casualty. The independent producer, run by the daughter of former U.S. Sen. Lauch Faircloth and once the 22nd-largest in the country, had 170 employees and contracted with more than 100 local farms in the Sampson County area.

Other companies that went under this year include Bunting Swine of Edgecombe County and Coastal Plains Pork and Perfect Pig, both based in Sampson County.

"Livestock production is the economic engine of Eastern North Carolina," Butler said. "There's going to be a big ripple."

Heart of hog industry

North Carolina is home to 10 million swine, nearly one hog for every man, woman and child in the state. That ratio jumps up considerably in the eastern part of the state, where the hog industry is concentrated and is an integral part of the economy. In Sampson County, there is one person for every 31 hogs and in Duplin County, one person for every 39 hogs , according to the state agriculture department.

While industry leaders scramble to find help from federal and state governments, hundreds of farmers are bracing for several more months of what's been called the hardest times the industry has ever seen. The situation won't get better until next June, when prices should stabilize, said Kelly Zering, an N.C. State University economist specializing in the hog and pork industries.

Deborah Johnson, the head of the N.C. Pork Council, said she is seeking help, even inquiring whether the situation could quality for federal disaster money. It doesn't, but the federal government agreed last week to buy $50 million worth of pork for school lunches and other federal nutrition programs.

U.S. Rep. Bob Etheridge, a Harnett County Democrat, wants to see that expanded, with the governmental buying excess pork to feed people at food shelters or rolling out a pork-specific food stamp.

Barwick, a Coharie environmental land manager who works with contracted hog growers to monitor waste lagoons, compared Coharie's bankruptcy to having a death in the family for the Sampson County community where he works and lives. He'll be out of a job as well, and worries what will happen in Sampson County, where local schools, farm equipment businesses, restaurants and churches depend on money earned from hogs.

"Really, the corn-based ethanol put us in a jam," Barwick said. "But this misnomer swine flu has finished a lot of hog farmers off."

The term swine flu is rarely heard among hog farmers, and gets instant disapproval when it is, Butler said: "It's not allowed in the circles I travel in. ... If they do 1/8say it3/8, I whack them over the head." who

Butler testified at a Congressional hearing last month in his role as president of the National Pork Producers Council.

Times are bad now, but the outlook for pork isn't, Zering said. As the economies in developing nations grow, the worldwide appetite for meat, including pork, is supposed to be going up. That puts the hog industry in a good spot, Zering said.

That's not much solace for those struggling now.

Allen Unruh used to raise 4,000 hogs at a time for Bunting Swine on his 40-acre farm outside Grifton. Since Bunting Swine declared bankruptcy this spring, Unruh's barns are empty and he hasn't landed a contract with another producer. The father of five owes tens of thousands of dollars in loans for farm equipment.

His wife works two jobs cleaning houses and at a bakery while he tries to look for masonry work.

The family applied for Medicaid recently after their 10-year-old son broke his arm at school, an injury that's cost $16,000 in medical bills after the family cut medical insurance out of their budget. Unrup never imagined his family would be applying for government assistance.

"I just figured I'd just retire in those barns," Unruh said. "We always thought it would be someone else that would need help from the government."

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