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The Rural Voice, 2000-01, Page 44News Wayne Snyder of Farmland Industries says competitiveness in pork is now at marketing level and producers must find a buyer. Marketing key to competitiveness in pork, speaker says The battlefield in competitiveness in the pork industry has shifted from the lowest -cast production to marketing, a buyer for a large farmer - owned pork processing co-operative told pork producers attending the Competitiveness seminar at Shakespeare December 1. Wayne Snyder, vice-president for livestock production with Farmland Industries Inc., told the overflow crowd at the meeting, sponsored by Ontario Pork and OMAFRA, that the situation has changed since the time when a producer who supplied a reasonable quality product at the lowest cost was guaranteed of a future. He told the story about turkey producers he knew who were the lowest cost producers but when the packing plant that bought their product closed, they were out of business. Today the key for a farm to be competitive is to have access to a market, Snyder said. That has led many producers into contracting situations. Today's big buyers want an integrated production system, he said. McDonald's, Hardees, the Japanese, all "want to be able to trace 40 THE RURAL VOICE the product right back to the farm." This is a challenge for Farmland, which is not an integrated company, Snyder said. The company's integrated competitors argue that Farmland is made up of independent producers and "independent producers won't listen". Pork producers "have to realize we have a buyer out there," said Snyder who is in charge of securing product for Farmland's four pork processing plants. McDonald's, Snyder said. send in a team of eight people to a packing plant to see how it operates. They particularly concentrate on how hogs are handled and killed. That's a significant change in what happened in the past, he said. Huge U.S. giants like Smithfield are actually paying more for contracted hogs than they would on the open market but they're willing to pay that price to have control of the product, Snyder said. The dilemma is where the profit sector in the pork food chain will reside — in the production sector or in the processing sector. In large integrated companies there doesn't have to be a profit at the production. level if there is sufficient profit at the processing level. Many of Farmland's producers don't like what they're being told by the company, he says. The Midwestern U.S. regional co-op is owned by 1600 local co-operatives representing 600,000 farmers throughout the midwest. It kills eight million hogs a year in four kill plants but that's only a fraction of the hogs produced by the farmer -members. Farmland started as an input -co-op but now processes beef and pork and markets grain. The company buys 42 per cent of the pigs it needs on the open market but three years ago started a vertically -integrated program to provide a uniquely superior product called America's Best Pork. "It was a consumer -driven focus, not a production -driven focus," Snyder says. The product begins with the genetics. "The Farmland Pig". Today Farmland manages 81,000 sows. 38,700 of them owned by the co-op and some in a joint venture, Alliance Farmers owned by 60 producers who start with 2500 -sow units. Though many of the sows are owned by Farmland, "our ultimate objective is to have member ownership," Snyder says. "The intent is to build equity ownership into the new style of production. We care that our members participate." A producer buys a unit of ownership in Alliance Farms. Alliance Farms is there to produce a quality product, Snyder said. The unique set-up tries to keep farmers independent while producing a uniform product. A unit of ownership owns a share of the whole organization. If a farmer wants to retire, he can sell his unit of ownership. "Not one share of stock has ever sold for less than it was bought for," Snyder said proudly. Those buying into the system can get help financing new buildings. A financing charge is made against each delivery. Eight years after the producer makes his first delivery, that financing charge is dropped. America's Best Pork is based on a three-part program. It starts with Triumph genetics to allow a consistent quality of product. On the open market Farmland buys from 300 different genetic types, Snyder says. Companies like Smithfield have a consistent genetic type.