Misery Loves Company
Jun 18, 2009
I had the opportunity earlier this week to participate in an exercise the pork industry does annually to forecast the challenges and opportunities that swine producers will face in the future.
Coordinated by the National Pork Board, the Informed Futurists Panel is a 24-hour meeting where a variety of people from other livestock sectors (which is why I was there), and others engaged in the production, processing and retailing components of the pork value chain, sit down to assess the future direction of hog production and the variety of factors influencing it.
The ironic part was that most of the issues, both from a challenge and an opportunity perspective, could easily have been the main topic of discussion at a dairy pow-wow.
The big concern right now is price: farm-level hog prices are too low, inputs are too high, exports have taken a hit, and a year-long bath in red ink is going to cause a major reduction in the number of pork farms (Smithfield Foods itself just raised this issue). In dairy we’re talking a 3% imbalance between supply and demand; in pork, it’s closer to 10%.
While the H1N1 flu has hurt pork sales and created some export roadblocks, my takeaway is that the larger issue for pork sales is the global recession, which is affecting demand domestically and globally for meat. The same thing happened with dairy exports, and domestic dairy demand last year. And the “new normal” of $4 corn, $13 soybeans, and $75 to $150 oil only deepens the wound.
The other big challenge that most of the porcine forecasters agreed on is that public concern about animal welfare, and pressure on legislators to do something about it, is only going to intensify. While dairy is dealing with tail docking (and to a greater extent, though it’s not really a dairy issue, with veal crates), the pork guys have gestation stalls in the cross hairs. We’re all on playing defense, and we’re not going to get the ball back anytime soon, it appears. All livestock farmers are facing the loss of the freedom to operate in ways that farms and ranches have done in the past. We face a new era of accountability and transparency, and have devised programs like Pork Quality Assurance and the National Dairy FARM not just to talk the talk, but also to walk the walk in terms of credibility and concrete actions to promote the health of farm animals, be they pigs or cows.
And one other topic of conversation in the hallways was the pork industry’s nascent Producer Retirement Program, wherein members of a new organization can contribute funds to help buy out the sow breeding capacity of other members. This program is modeled after the dairy Cooperatives Working Together program (just as the potato industry has also done). For all its critics, CWT has served as a model for how farmers, regardless of the commodity, can work together to do something about supply at times when prices drop. It’s important not to lose sight of what everyone else in agriculture is doing, needs to do, and can do with you.