Pork Signals: U.S. Producers Put It All Together

U.S. pork producers are the undisputed leaders in global pork production, but you mustn’t rest on your laurels. Other countries would love to overtake your position, and are gaining the means to do so.

( Dennis DiPietre and Lance Mulberry )

As we approach the midpoint of the year and you make your way to that celebration of all things pork known as World Pork Expo, you will have the chance to hear and see the latest and greatest technology, genetics, marketing ideas, software and other support systems that make U.S. pork production the undisputed world leader. Don’t forget to look around you, too, at the producers, veterinarians and support people walking by because they also are key to world leadership. 

To take the crown, a country needs a combination of things few countries around the world can assemble in a single package. Many have pieces, but none have the full package that the U.S. has brought together.  

Don’t garner from this praise that you can rest on your laurels, though. There are many up-and-comers who are eyeing your spot and challenging for the coveted position. 

In the big U.S. transition, which occurred during the 1990s, I always thought the twin advantages of an abundant feed ingredient supply coupled with a multitude of packer choices, closely available, often covered a multitude of shortcomings within production systems located nearby. It did so by providing cheap feed and a ready hog market with bid-up hog prices to fill the plants.
These two conditions thereby lulled producers into a false sense of security about their strategic future and the changes they needed to make to remain competitive for years to come.

Strengths and Challenges

Here’s a brief summary of what I think is your strength; and from traveling and working closely with producers all over the world, what other countries must accomplish to gain the same advantages you enjoy. I’ll also suggest what you must do to keep it. 

Consider, for instance, how India leap-frogged the need for a wired telecommunications system by going directly to cellular/satellite systems, thereby shortening the 100-year-behind development gap to zero.

You may think that some things are simply natural endowments that cannot easily be replicated or substituted away when they do not exist. 

Included in this list are things like the availability of a vast area of fertile earth and plentiful fresh water, which can both produce feed ingredients in abundance and at less expense relatively speaking than other regions.

These same lands can accept manure nutrients to make the entire process sustainable. The vast open areas coupled with existing infrastructure investments provide the ability to locate production units at a distance from population and other production systems that at least partially benefit biosecurity efforts.   

New Feed Source?

You should never consider even natural endowments to be permanent advantages, as work is already underway, and has been for some time now, to produce animal feed from insects. Insects provide a huge and rapidly renewable source of high quality protein and they consume bio-waste and other organic by-products to boot, all without the need for vast tracts of fertile land. 

The expected path of development projected by a feasibility study published by the European agricultural center at Wageningen University and Research in the Netherlands offers the first commercial applications for aquaculture, then pet food, and then right up into poultry and pig feed. 

Your fruited plains sitting right below those purple mountain majesties are not a permanent global advantage. In addition, regions without feed production assets are making long-term leases in areas around the globe to acquire fertile land resources rather than the fertile land.

Veterinary Services

One thing you rarely see around the world, but is characteristic of U.S. production is the close association of veterinary resources which are at once, highly motivated, highly educated, highly entrepreneurial and cross-trained to provide excellent production and management consultation and even economic, record keeping and financial advice including sourcing capital. 

Veterinarians often are directly connected to one or more of the several diagnostic labs at universities, which provide them rapid answers to diagnostic puzzles. This close connection speeds appropriate treatment and minimizes economic and animal welfare loss. 

In many countries, there are outstanding vet resources and clinic groups but they have had a late start in the cross-functional capacity. Sometimes this is simply by tradition and other times it is regulatory, preventing them from giving professional advice outside of their academic and certified specialties. 

This is a huge disadvantage outside the U.S. but there are many ways the gap is being closed.

First, almost all the large U.S. vet clinics and management systems provide global consultation and some even have centers or offices in other countries in association with local vets.

Second, the availability of the Internet and the rapid transmission of both written material and training visuals (including live human lectures) around the world have lessened the need for every major pork production region to attempt to follow the identical development path of the U.S.

Pharmaceutical, feed production and genetics companies in the U.S. not only find a highly educated and receptive market for their products, but also the volume of market that justifies both cost competitive prices and the provision of often outstanding support services. 

This is a multi-faceted asset rarely completely matched in other countries and sometimes prohibited.  Most of the new inputs coming to market today require adjustments to the production protocols to optimize their potential for achieving the highest returns. Therefore, the level and scope of technical assistance available to both producers and their vets is perhaps greatest in the U.S.

Owner/Manager Expertise

Let’s not forget about the owners and managers of pork production systems here in the U.S. The level of commitment to ongoing training, cooperative activity (recently coined as “coopetition,” combining cooperation within a competitive environment) and the heritage of free-market entrepreneurialism has caused an outcome to emerge over time that is hard to match without generous subsidies that are often transient and thereby ineffective in the long-run. 

There is a famous regional hamburger chain in California that imprints different verses from the Bible on their cups, packaging and fry trays. The verses are subtly placed and in small print. 

I remember seeing one by accident on an overturned French fry tray that referred to Proverbs 24:16 which states, “Though a righteous person falls seven times, that one will rise up, but an evil doer will stumble into ruin.” 

Without attempting to make any religious point here, let me say that in my own practice, I have watched the uncommon and incredible tenacity of common producers and their families. While buffeted again and again by periods of low profits, recurrent PRRS or other disease breaks, rapidly changing markets and competitive conditions, they mount gritty and smart recoveries. They married sheer, unconquerable optimism with clever, brilliant and effective countermeasures until they landed back on their feet and won a place at the table of future profitable production. 

Kudos

Here’s to all of you for that grit and the incredible revolution in dependable, sustainable, healthy food production, undertaken for the world. That legacy is not guaranteed into the future and may one day pass to another region but it is the fundamental asset that will drive increasing future global and domestic sales as well as profit resilience if it is not surrendered.

Editor’s Note: Dennis DiPietre (far left) and Lance Mulberry are economists with KnowledgeVentures, LLC. They consult with producers, processors, pharmaceutical companies, genetics firms, nutrition experts and technology providers, throughout the global pork chain. The focus of their consultation is driving client innovation and optimization in precision agricultural processes through bio-economic modeling. Call (573) 875-7890 or email: dennis@precisionpork.com  

 

 
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