<b>By CELESTE BAUMGARTNER<br>
Ohio Correspondent</b></p><p>

SOMERVILLE, Ohio — For the past 10 years Jeff Schwab has had a farrow-to-wean hog operation, currently at about 700 sows producing about 16,500 pigs per year. Although he is losing at least $3 per head right now, he has no plans to get out of the business. But he is belt-tightening to cut costs wherever possible.<br>
“It’s definitely been worse the past three or four months,” he said. “We had high corn prices last year but we had good pig prices to go along with it. Actually most of 2007 was a profitable time. But since about the first of November pork prices have fallen because we have a record number of hogs in the United States; corn prices have gone up even higher than we thought they would.”<br>
Last fall when Schwab and his wife, Toni, were planning the budget they expected higher prices but were thinking $4 corn and $250 bean meal. Then corn went up to $5 and bean meal is $360.
“We’ve come to find out premixes, which is the minerals and vitamins, are going to skyrocket through the roof,” Schwab said. “A lot of the ingredients used in them are also used in fertilizers so we’re going to have a major increase.”<br>
Fuel prices are up almost a third and feed prices have doubled; meanwhile hog prices have fallen $10-$15 a cwt., he said.
Schwab has been in the business for 30 years, since high school and has seen rough times before; but this is different.<br>
“The government has mandated we’re going to have ethanol production,” he said. “We’re not going to peak on ethanol production until 2015. At the same time we have a world shortage of grain and in the last few years corn and soybean producers have done a very good job of marketing their product. We’re using so much corn and soybean meal in consumer products, the food, plastics, oil everything, so we’ve got a large demand for corn and beans.”<br>
Schwab said he sees the need for ethanol but the government has subsidized ethanol production and has not protected the livestock industry.<br>
“I think the next year to year and a half are going to be devastating for the livestock industry,” he said. “Long term, the livestock industry will be very good; but short term, we’re going to see massive losses and maybe massive liquidations come this fall.”<br>
To get through this rough patch the Schwabs have worked with several feed companies on fine tuning the feed rations; they’re looking at the sows’ daily needs to make sure they’re getting what they need and not a scoop more.<br>
“We’re trying not to consume as much fuel,” he said. “We’re trying to watch all of our controls in our barns to make sure the temperatures are just right, that we’re not losing any heat.
“We’ve looked at our vaccines, we’ve been able to change some of them a little bit to save a little cost,” he said. “Personally, right now I’m not taking a paycheck out of the farm, I’m living off my wife’s pay.”<br>
The Schwabs have also cut down on their help. The last few years have been good, and they have updated all of their barns so they will do no projects other than normal repairs, he said.<br>
“We’re cutting costs as much as we can, but we’re going to end up eventually having to borrow operating money to cover our losses,” he said.
Yet long term, Schwab is optimistic. He expects pork exports will increase.<br>
“Worldwide, pork is the No. 1 meat,” he said. “There is a great demand, and we’re just now starting to get into the markets like Korea, Peru, China. China has an unlimited need for pork; that’s their main meat.”<br>
“I think long term we’re going to be able to export a lot of product. It is going to be good,” he said. We have a product that everybody wants we just have to do the job marketing it.”