Des Moines, IA - Over the decade ending in 1997, the pork sector was the most profitable segment of U.S. agriculture. That coincided with the period that the national pork legislative checkoff has been in place. Demand at the producer level was up 6% during the 10-year period, while typical farrow-to-finish operations had profits averaging more than $10 per hog.
Currently, the hog price situation is at a low ebb. As a result of a number of factors, U.S. pork producers are presently experiencing low hog prices. This is not an acceptable situation, and the National Pork Board and its associates at the National Pork Producers Council are currently working on a series of actions to help ease the price situation.
Targeted U.S. consumers will be reached this year with more than three positive pork messages each week through checkoff funded advertising and public relations efforts. More than 80 million households will be reached via 6,044 Pork. The Other White Meat(R) commercials on 20 cable TV networks. Thirty consumer magazines will carry a total of 83 “White Meat” ads during the year. All of the print and broadcast ads are designed to increase consumer demand by featuring pork's popularity.
NPPC will reintroduce “The Other White Sale,” a promotion used successfully in late 1994 when hog prices were low. The sale will use various advertising print and broadcast media to alert consumers to the good values they can find on fresh pork in the retail meat case. NPPC and the Pork Board have teamed up with Kraft Foods and one of its brands, Bull's-Eye BBQ Sauce, for an eight month promotion that will promote and serve six million samples of pork at more than 400 major public events in the southeast and west coast states this year. “The Bull's-Eye Barbecue Round-up featuring Pork. The Other White Meat” promotion will include a touring 18-wheeler truck and two recreational vehicles, as well as hot air balloons.
The successful “Slow Roasted Pork” sub sandwiches introduced by Subway Restaurants in Indiana last year, will be expanded to several hundred Subway units beginning Memorial Day and extending through June. The sandwich was created as a result of NPPC making available one of its celebrated chefs, Alex Patout, to work with the restaurant chain's own personnel. NPPC is currently working with 20 of the nation's leading food retailers in various phases of the checkoff funded Category Management Program. The objective is to increase volume and profitability of fresh pork in the retail meat case of the nation's leading retail grocery chains. In 1990, NPPC foodservice specialists helped initiate the idea of marketing bacon to fast-food operators and others as a way of adding additional flavor to established sandwiches as well as new entrees. Today, just about all of the major fast-food chains have at least one sandwich featuring bacon as a “flavor-added” ingredient.
In response to a request by NPPC for assistance during the present low hog price situation, USDA has purchased 14.2 million pounds of various frozen pork products so far this year for use in the government's school lunch and various domestic federal food assistance programs. In the period between July 1997 and January 1998, the USDA Agriculture Marketing Service purchased a total of 25.5 million pounds of pork for the same domestic feeding programs.
USDA, at NPPC's request, recently announced an additional $13 million in GSM-102 export credit guarantees to assist U.S. pork exports to South Korea. Previously, $100 million in GSM-102 export credit guarantees were released for use by the U.S. meat industry. NPPC and other livestock meat organizations are currently seeking an additional allocation of $500 million in GSM-102 export credit guarantees to help assist U.S. meat exports to South Korea.
Here are some of the things the National Pork Board and the National Pork Producers Council are currently doing with checkoff dollars on behalf of all pork producers:
Our biggest challenge is to try and keep in business all pork producers who want to remain competitive, and profitable. Here are some of the things we are doing now that benefit all pork producers.
The National Pork Board and NPPC believe that smaller pork producers can compete in the changing pork industry, if they will adapt to new information and technology. To that end, a series of Networking seminars has been held in various states. The seminars are conducted in the belief that value-added networks provide a potential for pork producers to capture a greater share of the value of their product. Smaller pork producers have the potential to meet specific market niches which will work to give them a competitive edge. The checkoff-funded Networking seminars also demonstrate how small pork producers can benefit from greater economies of scale and market influence by joining with other producers to form networks for marketing, purchasing, and adding value to raw commodities.
All producers are interested in fair, competitive and open market price discovery. To make accurate and verifiable data on pricing available, NPPC is cooperating with the USDA Market News Service in a Price Discovery Project.
Some pork producers lack sufficient skills in financial management. To meet that need for small and medium size producers, NPPC has expanded the Pork College concept initiated by the Iowa Pork Producers Association, and extended it to other states. A producer leaves such a session with a completed business plan that they can put to actual application in their own operation.
The future of independent pork production depends on the ability of a new generation of producers to enter the business. To ensure that young people are able to enter pork production as an independent operator, NPPC is in the process of developing the New Pork Producer Program. NPPC is also working with the Center for Rural Affairs Beginning Farmer Development Program Initiative.
Risk management is viewed by NPPC as a major part of the safety net in times of low prices. To meet this need NPPC is developing a risk management program to be delivered in three phases. The first phase will begin in the fall of this year.
The checkoff-funded Pork Quality Assurance program has not only helped enhance foreign trade efforts, some PQA producers have reported cost savings of $3-$5 per head as a result of efficiencies resulting from their participation in the program. Approximately 24,000 pork producers are currently enrolled in Level III of the PQA program. Some of the newer aspects of the PQA Level III program will help producers work with packing plants on HAACP related issues, thus helping farmers meet the demands of the modern marketplace. The checkoff-funded Environmental Assurance Program is providing pork producers of all sizes practical, proactive educational information which enables them to identify and economically address the key management issues affecting the environmental quality of their operation and their community. Approximately 7,000 pork producers are currently active participants in the Environmental Assurance Program.
An annual series of Producer Competitive Seminars has been held each winter in various states for the past three years. The seminars are designed to help pork producers remain competitive.
To change the thinking of many rural lenders, that small to medium size pork producers have no long- term future in the pork business, NPPC developed a checkoff-funded program to change that sort of mind- set. In the fall of 1994, the first National Pork Lending Conference was held. Similar conferences continue to be held each year, and state pork producer associations have expanded the concept, providing further education to lenders on a state level.
For the past year, the USDA'S Natural Resources Conservation Service has been involved in a partnership with NPPC that provides a liaison person to serve as a direct link to producers in giving direction and guidance, especially to small and medium size pork producers, on how to apply for and use Environmental Quality Incentive Program (EQIP) funds. Many different media, including the Internet, are used by NPPC and the Pork Board to deliver research results to pork producers, enabling them the opportunity to learn about and adopt new technologies, in that way improving their overall profitability. The annual World Pork Expo event is attended by thousands of pork producers from all across the nation. They attend free educational seminars conducted by nationally recognized experts in the fields of swine production and marketing, providing pork producers an opportunity to increase their practical knowledge.
Producers can get answers to specific production, technology and management questions from swine specialists and business professionals at the Pork Pro Center and in the Business District display throughout all three days of World Pork Expo.
As a result of an extensive checkoff-funded Terminal Line Genetic Evaluation research project, the largest unbiased study of its kind ever attempted on a large scale, pork producers now have access to genetic information that helps them make better selections in their hog breeding programs. A similar program is now underway, looking at maternal line characteristics.
Pork producers can now access a wealth of news and information about the pork industry, including checkoff-funded research, on the computer right in their own home via the pork industry's site on the World Wide Web. The site is partially funded by the checkoff. One part of the site allows producers to ask questions of experts in various fields of pork production. Another section allows producers to share information with each other. Yet another section of the Web site is used for consumers to access information about the pork industry and pork products.
To assist producers and their lenders with evaluating pork operation efficiencies, checkoff funds have been used to develop new Production and Financial Standards. The new standards provide uniform definitions and ratios that will allow pork producers and other segments of the pork chain to compare records and production systems more easily. The standards will also allow producers, lenders and others to better understand the impact production practices have on debt, equity and capital.
NPPC is developing an Animal Health Emergency Management Plan to address the potential risk of the outbreak of a foreign animal disease, such as Hog Cholera or Foot-and-Mouth Disease, in U.S. swine herds. Much has been learned in observing the recent foreign animal disease outbreaks in the Netherlands and Taiwan. Hog Cholera is currently present in the Caribbean and represents a real threat to the U.S. pork industry. The importation of such a foreign animal disease into the United States could potentially devastate the U.S. pork production industry.
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