A pig farmer's last truckload
Norlin Gutz, 56, Storm Lake, Iowa
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| Gutz, with his wife, Becky, and son, Ryan, went from a net worth of $1.3 million to bankruptcy in just 18 months. |
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(Fortune Magazine) -- Out in Storm Lake, Iowa (pop. 10,076), pigs outnumber humans by about 18 to one. For 36 years Norlin Gutz raised 50,000 piglets annually on a farm first settled in the 19th century by his great-grandfather. Gutz was one of the few remaining independent pig farmers in an increasingly corporate industry. But on Jan. 11, Gutz loaded his last 1,500 pigs onto a truck. Norlin Gutz is bankrupt.
"What caused it is the feed costs," he explains, "and what started that was the unleashing of the ethanol industry. If there had been some type of a gradual phasing in, maybe we could have adjusted. But it was bam! It's just been devastating for the industries that use the corn." While the price of corn has dropped over the past few months, in 2007-2008 the cost per bushel rose from $2 to $7. At the same time, a glut of pigs led to lower prices per head. Gutz says that at the bottom of the market, he got $10 for a ten-pound baby pig that cost him $30 to raise.
In March 2008 the bank Gutz had done business with for almost seven years asked him and his wife, Becky, to come in for a conversation. "We were nervous," Gutz recalls. "We knew we had trouble paying bills. We just prayed that we would accept whatever happened." The loan officer confirmed their worst fears - that there would be no more financing - and Gutz began the process of liquidation. He slowly let go his dozen employees, sold his farm equipment, and fattened his baby pigs to a 260-pound marketable weight, selling them for whatever he could get. He became a statistic, one of the 900 pork farms that the USDA estimates have disappeared since 2006.
He also started suffering from severe headaches. "The doctor asked me if I was angry. I was surprised. I said, 'I may be disappointed in myself, but I'm not angry.'" Eventually the headaches stopped. But the second-guessing has not. "I was trying to find a niche by using an older facility at low cost," Gutz says. "But it wasn't a very efficient facility. The bank doesn't even want it."
On Dec. 2, Gutz declared bankruptcy; 18 months ago he had a net worth of $1.3 million. To make ends meet, the farmer has been taking care of pigs for other people. In November, Becky hit the books so that she could renew the nurse's license she hasn't used in 30 years while raising five children and helping out on the farm. Successfully recertified, she accepted a job in a nursing home in January. "Once you've had your heart tore out," says Gutz of his wife, "it's hard to get enthused and go back into it. She's looking forward to something new."
Whether he will also try something new remains to be seen. "I grew up in this business," says Gutz, who was once recognized by the state as a Master Pork Producer. "I don't have anything else I can do. You feel like you've let your wife down, your family, your parents, you know? And you feel like other people are talking about you. It's embarrassing. This was my whole world."
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