TEMPLETON, Iowa — A cold drizzle falls on Klocke Farms, contributing some gloom to a day that Ben Klocke can only describe as “interesting.”
“There’s a lot going on,” he says.
Klocke and his family run a 2,800-sow farrow to finish operation near here in Carroll County. Along with his parents, Dave and Karen Klocke, he also farms about 2,000 acres of row crops, mostly corn. That corn is placed in a grain bank at a nearby co-op, where the family buys feed.
Klocke oversees the sow herd. The family recently converted to a batch farrowing system, covering 5,000 pigs per batch over four weeks.
“Anything like that takes a lot of time to put together, but we think it’s really going to work well for us,” he says.
There have probably always been pigs on this Century Farm, Klocke says. The family used to raise Spot boars, but in 1992, they built a 1,200-head farrow to nursery building, working with Farmland. That lasted until 1998, when the operation expanded to its current size.
“We bought out the herd from Farmland in 2004,” Klocke says. “Working with Farmland, that was our way of getting to where we are now.”
He uses PIC genetics in his herd, and uses Duroc genetics for his terminal sires.
“That’s what the plants seem to be wanting,” Klocke says.
The family works with Nutra Tech, based in Storm Lake, Iowa, to manage the grow-finish side of the operation. Most of the pigs are sold to Tyson Foods and are marketed at 285 to 290 pounds.
As the pork industry changed over the past 30 years, so have farrow to finish operations. Many sows are kept off-site by some of the larger producers, and contract finishing has become more and more prevalent.
Those changes have created challenges for traditional farrow to finish operations, says Kelvin Leibold, Extension farm management specialist with Iowa State University.
He says while there is still a place for those smaller operations, risk management can sometimes be tricky. Those challenges include market prices.
“The challenge is getting a competitive price from the harvest facilities,” he says. “So in effect, we have at least 80% of the pork production under contracts of some sort. If we had a good handle on how many of the independents were under contract, we might discover that 10% or less of the total pork production is truly ‘independent.’
“So that means that they are the residual suppliers. They get paid a premium when hogs are short and get paid at lower prices when there is excess.”
Size is also a factor when estimating costs of production.
“One of the major factors is the cost of production per pound of pork sold, so there are economies of scale in pork production,” Leibold says. “In the past, the idea that one could raise their own corn and supply it to your own hogs at a lower cost was a factor in ‘walking the corn off the farm.’
“And it provided some risk management in managing income streams. Low-priced corn may mean high profit hogs and high-priced corn meant low-profit pigs, so there was some offset of risk. So is this a big enough advantage today to offset the challenges on the marketing side?”
He says COVID-19 impacted the hog industry in many ways, including increased demand for hogs sold directly off the farm to the consumer.
“If I can’t be competitive on cost of production, I can work my way out of it by selling for more if I can sell some or all of my production into a specialty market that pays a premium,” Leibold says.
“So with COVID-19, are we going to see a resurgence in demand for local or farm-raised products? We will see some, but when you look at the total number of pigs produced it will be a very small market overall I believe. That is not to say that some producers in certain areas will be able to capture that market and hold on to it.”
He says producers need to establish some sort of advantage when competing against producers with several thousand sows. Among those advantages are growing their own corn, utilizing manure on crop ground, paid-for buildings and selling into a premium market.
Klocke says finding quality labor is perhaps his biggest challenge.
“We are always looking for help,” he says. “If you like livestock, there are a lot of jobs out there.”
Despite that challenge, the west central Iowa producer says he is always looking for a new opportunity.
“Things are always changing, and we are always looking to improve. You have to be ready should there be a new opportunity,” he says.
Klocke says there are likely more farrow to finish producers in the Midwest than many people think. He says in counties like his, livestock production is encouraged and most farms are diversified.
The future is promising for those who still like farrowing pigs, Klocke says.
“I just like the entire process,” he says. “You can make a little change and follow the ripple effect all the way through the finisher. Watching that is a lot of fun for me.”