By Clint Schwab, Vice President of Science and Technology at The Maschhoffs
I’m willing to bet that many have heard some version of the quote, “The only thing constant is change,” uttered at you or around you within the past year. In fact, within our industry, the notion of our evolving industry dynamics seems to be picking up steam. We can all cite tangible examples … and we don’t have to think too long to compile an exhaustive list.
While some of our existing realities represent systemic risks to the industry as a whole, many others clearly implicate a brighter future. It’s a constant mix of headwinds and tailwinds. Your individual viewpoint of where the balance sorts itself out can have a real impact on the outcome. Perhaps it’s because I naturally have a “glass half-full” perspective, but I personally believe the industry has a bright future in the near term. And 2022 is positioned to be the first step in a more vibrant industry over the next three to five years.
Headwinds
The current pressures against business returns, growth and stability are very much the same as many would have described a year ago – and this tends to be an easy list to populate. They are the interconnected sources of the volatility we have all experienced recently.
We can easily debate the relative magnitude of each, but the first macro industry headwind revolves around the complex [and largely unstable] supply-demand scenarios embedded across the entire pork value chain. I’m far from an economist, and don’t claim to grasp all of the connections – but like all of us, I can feel the imbalances at play, and am uncertain when things start to stabilize. Whether your role deals with amino acid availability, on-farm supply constraints, U.S. retail demand or the global trade implications on export volume, we’re all impacted.
The growing threat of foreign animal disease remains on top of everyone’s mind. As African swine fever (ASF) migrates across the globe to areas much closer to our supply chain, the threat has escalated. On top of that, new porcine reproductive and respiratory syndrome (PRRS) variants have exposed us to a new definition of a “nasty virus.” This has played a role in the industry supply picture as well – and in some cases, has illustrated the fragility of our forecast models.
Finally, and perhaps most vivid, is labor. There’s no question that the labor challenge is much broader than our industry alone, but we certainly continue to be impacted. Unfortunately, this challenge feels more like a cannonball versus a bullet for some segments of our industry.
Tailwinds
Despite the pressures on our individual businesses and the industry as a whole, around every corner is an example of improvement. While many are direct responses to headwinds in an effort to stabilize outcomes and minimize risks, there are numerous examples of business innovation and structural improvements that have and will benefit our industry in the longer term. What’s important is each of these examples need to be designed and implemented in a way that sustain themselves and allows the benefits to compound over time.
In my role it’s hard not to point to the impact of technology on our industry – and I think it’s safe to say that many of the tools that were at a concept stage a short time ago have now begun to demonstrate material impacts. Within the digital space, the list of examples continues to grow. Whether that pertains to better ways to integrate various sources of data or improved analytical methods to monitor herd health, better decisions have resulted.
To name a few, there are new software applications to support on-farm training, advanced technology to support the pig’s micro-environment, demonstrated genetic change in complex traits, and implementation of automation within sow farms. The companies behind these examples are learning fast and are increasingly backed by growing resources, so I anticipate the success stories will grow in abundance over the next couple years.
Just as importantly, I am encouraged by a growing sense of partnership and collaboration within the industry. This is a very positive leading indicator for the industry. It’s no surprise that when we can find opportunities to leverage joint perspective, competencies and resources, the resulting synergies create a win for everyone.
The recent International Conference on Pig Survivability is a great example of how partnerships across academia and industry have helped develop opportunities to solve complex industry issues. Other collaborative efforts led by the National Pork Board, National Pork Producers Council, Swine Health Information Center, among others, have elevated our focus on foreign animal disease preparedness, sustainability, global trade and risk management.
Align Resources
It is important to remember, however, that participation from every segment of the industry is fundamental to leveraging the synergies that exist – and we all need to look for opportunities to play a role. Whether it comes to fruition in the form of business acquisition, academic partnerships, or even collaborations among producers, the realization that we can’t effectively “go at it alone” will create real value in the industry.
People have always been paramount to our industry, but I sense a greater focus on people development and culture. Perhaps the added emphasis resulted from challenges created by the pandemic, but regardless, the change is positive. As an industry, we’re embracing an international workforce, placing more resources on training, paying greater attention to the higher purpose of what we do and becoming more involved with our communities. It’s hard to find an industry conference where these topics aren’t a significant part of the agenda – and that’s a good thing in my opinion.
There is no question that as we look ahead toward 2022, we will continue to face many of the same lingering [and some growing] challenges throughout our industry. More change is inevitable. In my view, we’re increasingly better equipped every day through adoption of more sustainable ways of addressing challenges and creating unique opportunities to improve. As we adopt a continuous planning mindset, our businesses will look less like a sequence of fiscal periods, but rather, a future outlook where resources are aligned to a balance of headwinds and tailwinds more in our favor.
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