Company cites low pork prices and effects from COVID-19 pandemic
North Carolina pork producer Maxwell Foods, a subsidiary of Goldsboro Milling, said it would permanently shut down its hog operations as a result of low pork prices and the effects of the novel coronavirus (COVID-19) pandemic.
“The continuing low prices paid for our product, together with the effects of the COVID-19 pandemic, make the current and projected financial losses unsustainable for the company to continue operating,” the company said in a statement. “The Maxwell family recognizes the enormity of this decision and it was with great difficulty that it was made.”
The company, which produced pork for more than 30 years, will phase out production of its 54,000 sows and expects all operations to cease by the middle of 2021.
“Maxwell Foods and its network of family farmers have been an important and vital part of Eastern North Carolina communities and their economic stability,” the North Carolina Pork Council (NCPC) said in a statement. “The Maxwell family, its executive team, its employees and its farm family system have all been at the forefront of continued progress in producing safe, quality and affordable pork products that are beloved here in North Carolina — and around the world.”
The NCPC said it would look for “sustainable options” for Maxwell Foods’ 150 contract farms.
“All of these individuals will be economically devastated during a very bleak economy,” said Eve Honeycutt, extension agent at the North Carolina State University Extension Office, in a report. “The contract growers who grow hogs for the company will be left with vacant barns. These barns and their property may carry debt, and taxes still have to be paid. This is a very complex and sensitive issue for our community,” said Honeycutt.
Other producers may need to close down
Steve Meyer, an economist with Kerns & Associates, said during a National Pork Producers Council (NPPC) media call on July 20 that the value of U.S. pigs has fallen dramatically since the start of the pandemic, and that, by the end of 2020, there will be 2.5 million fewer hogs slaughtered than there should have been because of processing plant closures. In addition to the loss of hog value, many pork producers have been forced to euthanize or donate their pigs when processing plant capacity tightened.
During that media call, NPPC President Howard “AV” Roth said some pork producers would not be able to survive this financial hardship.
“Without swift congressional action to address this dire situation, me and thousands of generational farm families could go out of business, forever changing the agriculture and economic landscape in our great country,” he said. “The impact of COVID-19 has caused hog values to plummet, creating a financial disaster for pork producers nationwide who face a collective US$5 billion loss this year.”
