Contract pig production offers ‘something vs. nothing’ for South Dakota county

Wallace “Wally” Knock of Willow Lake, South Dakota, chairman of the Clark County Commission, said his community is welcoming livestock development – despite outside ownership – because livestock is the only thing that offers opportunity in his rural, agricultural economy.

December 19, 2022 05:30 AM

WILLOW LAKE, S.D. — Wallace “Wally” Knock is an advocate for livestock, yes, but he’s really after an economic climate for people.

He wears a lot of hats to get that job done.

Knock, a farmer from Willow Lake, South Dakota, is chairman of the Clark County Commission, a county of about 3,800 citizens. In the past four or five years, he and the commission have played a role in its livestock resurgence.

Knock knows some people don’t like “contract feeding,” and only want local-owned livestock, but he said that’s a false choice.

“Yes, the very best thing would be that every animal in Clark County was owned and run and staffed by local people,” Knock acknowledged. “That would be the ultimate.”

Big dairies being built today are a $50 million to $60 million investment, he said. And somehow locals don’t want to be owner/managers of a 10,000-cow dairy even though that kind of development can double the tax base in a township that lands one.

“The next best thing is to have anyone who wants to come in, so at least we get expansion of (livestock) numbers, which is the main driver of the economy,” he said. “The second best thing is to have the animals — no matter who owns them.”

By  Mikkel Pates

It’s for the kids

Knock, 63, and his wife, Kathy, have farmed here since the early 1980s, All four of his grown children are part of their farm, or taking roles in cropping and livestock care in the region. He has 15 grandchildren in the area.

Knock was inspired to community service by enrolling in the South Dakota Agricultural Rural Leadership program. For 21 years, Knock was on the Willow Lake school board, many as chairman. He became alarmed that Willow Lake High School graduating classes went from the 40s to a low of only four graduates in the 1990s. He was a member of the board of directors for Wheat Growers, a grain and agronomy cooperative in the James River Valley, based in Aberdeen, South Dakota, and then on the Agtegra co-op board in 2019 when Wheat Growers completed a big merger with North Central Farmers Elevator.

Knock represents Agtegra as chairman of the board of governors for Dakotaland Feeds LLC, based in Huron, South Dakota, and owned by Land O’Lakes, Purina Nutrition, and Agtegra. The company in recent years acquired Circle K Feed in Glen Ullin, North Dakota; and Diamond W Feeds, in Medina, North Dakota. His daughter-in-law, Roxanne Knock, holds a doctorate and is Dakotaland Feeds’ staff nutritionist.

Approving permits

In 2018, Knock was elected to the Clark County Commission. He ran for re-election, unopposed on Nov. 8, 2022. The commission is in the position to approve livestock permits, Knock said. Clark County planning and zoning regulation around here only started in the mid-1990s, he said.

Initially, the “setbacks,” or spacing, for locating large dairies was reduced from 3 miles to “a little over a mile” for the large, 15,000-head dairies. The public hearings drew 13 people, he said.

“Not a single person testified against it,” he said.

Recently, the commission has permitted seven “Pipestone-system” sized facilities, with a capacity to hold 2,400 hogs per barn and finish twice a year. In the past five years, the county has passed permits for three 5,000-head farrowing facilities. The commission has approved three large dairy enterprises including two by Riverview Farms, based in Morris, Minnesota. When in operation they’ll milk a total of 25,000 cows.

Clark County has seen less of the public resistance to swine expansions.

“A lot of times people don’t want to contest something and say they’re against it unless it’s right next to them,” he said.

Knock sees livestock as the “only game in town” for many young people in rural South Dakota, and the basis for other related enterprises.

“People that have kids that are in grade school, you know, what do you think the opportunity is going to be for those kids when they graduate from high school? Because at the rate we were going, there were zero opportunities,” he said. “Hopefully, we’ve been doing something so that there are some opportunities for somebody, you know.”

All livestock

Knock knows something about weathering market risk from owning livestock. He grew up in a family that milked cows in the 1960s and 1970s. He graduated from Willow Lake in 1977, took two years of dairy science at South Dakota State University, then came home to join the family farm.

His father owned a farrowing barn that held 26 sows. The Knocks sold feeder pigs to producers who would finish 150 to 300 pigs in a year. The Knocks rode out the rugged 1980s farm credit crisis only to run into a buzz saw of a hog market in the 1990s.

Pig prices fell to 9 cents a pound while corn was still $5 per bushel.

“You really didn’t need a calculator to figure out whether you were making money.” (He wasn’t.) He remembers selling feeder pigs for $3 a head “It was a lot of red ink and I wasn’t going to let it take my whole operation down.”

In 1996, he quit milking. Dairy farms declined from about 40 in the county to one or two.

In 1999, he started KL Inc., with his father-in-law, Roger LaMont, and brother-in-law, Doug LaMont. It was a Murphy Farms setup (later, Murphy Brown, and then Smithfield Foods, which partnered with a Chinese group in 2013). The pig barns were “100% financed” by Farm Credit, with a 10-year mortgage, covered by a 10-year contract, he said.

Initially, two-thirds of Knock’s hog barn check would go to the mortgage payment, and one-third for maintenance, insurance and wages.

“I don’t own the pigs and I don’t pay the feed bill,” Knock said. He gives a windshield tour around the barns that still are providing a living for his family. “I get paid for taking care of the pigs. This was one of the few things that you could do in the late 1990s that required no money down and got you into something. It is probably what kept me on the farm.”

Evolving technology

The public doesn’t often see how pig production technology has changed, but Knock is eager to share about it.

Knock’s barns stand three-in-a-row, with 1,100 head capacities each. They started as feeder-to-finish (50 pounds to 280 pounds), turning over three times, and have switched to wean-to-finish (16-pound pigs to 280 pounds), turned twice a year.

His older barns are curtain-ventilated. They are equipped with what’s known as a “shallow-pit” manure system, about 15 inches deep. This shallow concrete pit is cleaned daily with a continuous cable that pulls two scrapers.

The manure is then pumped about 100 feet and up into a 1.3 million gallon “Slurrystore.” (made by CST Industries, a sister brand to Harvestore.) Once a year, he hires a professional to apply the manure to fields. The company uses umbilical system that lays an “umbilical” hose to the field, and then drags the application hose behind a system that knifes it into the soil. Every year the system fertilizes 200 to 220 acres.

In the early 2000s deep pits were replaced with the curtain system — shallow-pit — “naturally-ventilated” barns, meaning no air conditioning and only occasional heating. Producers would become members of farrowing co-ops that would produce feeder pigs.

Today, the whole industry has shifted toward “wean-to-finish” pigs.

Now “weanlings” are moved into the barn at 21 days old, or about 16 to 17 pounds. These younger pigs require temperature control, not available with curtains. The new barns today returned to the “deep-pit” style, with fan-ventilated pits, that are 6-8-feet deep. The manure is contained before it’s spread on the fields.

Initially, excess manure was seen as a negative byproduct of confinement pigs.

“If someone was willing to pay for the pumping and spreading and placing the nutrients on a field, the barn owner wouldn’t get much for the manure,” he said.

Today, at higher fertilizer prices, manure generates income.

“Now, if a person wants manure, he’s going to have to pay the person that’s selling manure something more than what the application costs would be,” he said.

Fewer crop jobs

Livestock is a lifesaver for small towns because crop farmers are getting bigger, with equipment done by bigger farms, with fewer hands, according to Knock.

“We’ve got guys who are farming 20,000 acres,” he said, noting they displaced 20 farmers. “If you are just relying on, you know, grain farming, to be the staple of your economy, it doesn’t take very many people for them to do that.”

“One person can (crop-)farm 10,000 acres by himself,” he said, “but one person can’t take care of 10,000 animals by themselves. It requires more numbers of people.”

It requires truckers, feed businesses, repairs, maintenance, veterinarians, construction and family needs as well.

Clark County is well suited to expand with livestock in that there is room for using the manure. Because of a lack of concentrated animal feeding operations, only 20% of the land is under a nutrient management plan.

In the 2017 Census of Agriculture, Clark County, South Dakota, had 602,000 acres in farms and $118.7 million in livestock sales, with a population of about 3,800 people in 2020. Meanwhile, livestock-rich Sioux County, Iowa, had 483,500 acres in farms and $1.4 billion in livestock sales, and about 35,800 people in 2020. Sioux County is also about 200 square miles smaller than Clark County.