Michigan pork producers react to Clemens Food Group facility | Michigan Farm News

Michigan pork producers react to Clemens Food Group facility

Category: Livestock

by Mitch Galloway | Farm News Media

Baby-Pig_MFN_11.16.18
Brian Pridgeon handles a newborn piglet on his farm in Montgomery, Mich. At Pridgeon Farms LLC, there are 3,600 acres of corn, 800 acres of beans and 70,000 hogs raised a year. | Mitch Galloway, Farm News Media

Some pork producers in Southwest Michigan are being indirectly affected by the new Clemens Food Group facility in Branch County.

Just ask Ken Norton of Spartanwood LLC, a partner at the Bronson, Mich.-based contract-weaned pig producer.

“Our farm doesn’t have a direct relationship with (Clemens),” said Norton, whose sows are owned by the Iowa-based company Spartan Creek, a shareholder in Clemens. “We are producing for somebody who is an investor of Clemens. This other person takes the pigs and finishes them. So our relationship is indirect, but the Clemens plant being there (in Coldwater) allowed us to do an expansion.”

Since coming online in July of 2017, the Hatfield, Pa.-based Clemens has stirred up movement in the pork industry, especially in Michigan. In many ways, the unique direct partnership between Clemens and roughly a dozen pork producers in the region resulted in the indirect relationship between the plant and other pork farmers in the region, according to reports.

For example, farms like Norton’s have shifted their business model to be more advantageous to the family’s hog business, which meant discontinuing its crop operations and liquidating some of the farm’s machinery.
By expanding its operation in 2016, and the “first pigs coming out” in the fall of 2017, Spartanwood now has the capacity for 6,000 sows in gestation or farrowing, with the goal to wean 3,100 3-week-old pigs per week, Norton told Michigan Farm News.

Prior to Clemens’ Coldwater facility, Norton said the farm weaned about 600 pigs per week.

“We knew that we needed to make changes to our operation,” he said. “Our old barn was total gestation stalls. The new barn meets the (HSUS) requirement by housing about half the sows in breeding stalls and half in pens, where they can express their natural behavior. … We were ready to do something different, and this opportunity came up.
“It’s a completely new operation.”

According to Ernie Birchmeier, livestock and dairy specialist for the Michigan Farm Bureau, Clemens’ Coldwater plant “brings stability to Michigan’s pork industry.”

“This is an opportunity for those who invested in the processing plant to have a home for their market hogs,” Birchmeier said. “It continues to provide them with what I think is a future for continued expansion, continued opportunities, and some risk management and security on a day-to-day basis—that (investors) have a home for the hogs they are producing, which is critically important.”

Reaction to the plant’s opening from Michigan’s pork industry was initially met with “excitement,” according to Birchmeier, which hasn’t waned.

“I think they continue to be (excited),” he said. “Anytime you put a new business and industry into a place, there’s going to be excitement surrounding that because it’s going to bring jobs to the region; it’s going to bring economic prosperity to the region. People are going to have the opportunity to do better. You have a group of pork producers in Michigan who have taken it upon themselves to provide stability to their future through investment in the industry.

“This plant is exactly what they needed.”

In addition, Norton said that without Clemens, finishing buildings “wouldn’t have been built.”

“Clemens has also been very proactive in the Coldwater area… trying to have a positive presence in the community,” Norton added. “I think we are in pretty good shape right now, and we are always striving to improve production and maximize production from the facility we now have.”

Elsewhere, farmers are also noticing the advantages of having a $255 million pork processing facility in their backyard.

Less than 30 miles from Spartanwood is Pridgeon Farms LLC, a Montgomery, Mich.-based family-owned pork farm. There, the farm is growing roughly 3,600 acres of corn and 800 acres of beans. The corn is then used as feed for the operation’s roughly 70,000 hogs raised annually.

“I think it’s increased the opportunity to market pork locally,” said Brian Pridgeon, a partner of Pridgeon Farms and member of the Branch County Farm Bureau. “It has increased our ability to handle a larger supply of pork across the U.S., so it’s freed up space for producers.”

According to Pridgeon, one of the constant concerns for pork producers over the last 10 years is following “suit with dairy, where we are getting more and more efficient, so we keep raising more pigs, which is great as long as you have a home for them and a way to process them.”

Until recently, places to market excess animals were “harder to find,” Pridgeon said.

“The industry was feeling really tight,” he said. “Clemens, by building a plant, as well as there were a couple of other plants that came online out West, has created bigger capacity to adjust for the growing (hog) market.”

Birchmeier agrees with Pridgeon, adding that “it’s important to note, that on any given day, there’s only so much room to process hogs in the country.”

“We were running out of shackle space, and there wasn’t enough space to process the pigs,” Birchmeier said. “The addition of the Clemens plant and the two other plants in Iowa helped to free some of that space.”

According to Pridgeon, the farm deals exclusively with the Delphi, Ind.-based Indiana Packers Corp. In May of 2007, Pridgeon said the farm weaned 9.5 to 10.5 pigs per litter. Now, “we’re pushing 12 pigs per litter weaned,” Pridgeon said, adding that his farm’s been in “preliminary talks” with Clemens for work if a second shift were added to the plant.

But “it hasn’t come to fruition” yet, he said.

“It’s relatively early to see what kind of impact Clemens is going to have regionally,” Pridgeon added. “Before they even sited it, (Clemens) wanted to make sure they had a core group of farmers to work with. So they build this core group ... and weren’t going to break ground unless there was a secure supply.”

Doug Clemens, CEO of Clemens Food Group, told Successful Farming in October that “without producers, we didn’t exist.”

“We didn’t put our finger on the map and say, ‘Boy, wouldn’t it be nice if we go to Coldwater, Michigan,’” Clemens said at the time, noting that “if it wasn’t for the Michigan producers coming to us with a need, we wouldn’t be where we are today.”

Problems persist with labor

One reason for Clemens’ inability to add a second shift in Michigan is because of labor issues, said Birchmeier.

“Labor is an issue across Michigan, not just for agriculture but for business and industry in general,” he said. “It’s my understanding that the folks involved in that plant—owners, management, and farmers providing the product—would like to go to a second shift. That will lead to continued expansion and growth for agriculture in Michigan, but you can only do that if you have people to help operate the machinery and equipment inside the plant, get the animals processed and put into a package that works for the retail consumer or wholesale consumer.”

Still, Clemens has created roughly 800 jobs since coming online, Birchmeier said, “with talks of an additional 500 jobs if they go to a second shift,” which trickles down to benefit the entire regional economy.

“Home ownership in the region benefits,” Birchmeier said. “Automobile sales in the region benefit. Schools can potentially benefit if they are equipped to handle the additional students. ... Certainly, everyone can benefit from this if it is done right, and it’s not just the city of Coldwater, it’s the surrounding region as well.”

According to Mary Kelpinski, CEO of the Michigan Pork Producers Association, Clemens’ new facility “means a lot to the entire pork industry.”

“It’s really added some juice back into the pork industry,” she said. “I haven’t heard anything negative about them, and they fit well within the community of Coldwater. It’s nice to have someone like that move into the state.”