The Rural Voice, 2000-01, Page 45"Our decision was .to create a
genetic platform with a standard
genetics," he said. "Our objective
was to benchmark the standards for
best meat qualities to produce
superior produce with uniformity."
"We think the main -line genetic
companies have failed to get the
inconsistencies out of their pigs,"
Snyder said.
Of the top 50 producers with 40
per cent of U.S. hogs, not one buys
its own genetics retail, Snyder says.
All grow their own replacement pigs.
Farmland has set a target of
300,000 sows from Triumph genetics
in three years, out of the roughly
400,000 sows needed to produce its
total kill.
"We've taken seriously that the
competitive battleground is at the
wholesale level," he said.
There are also standards for
animal nutrition, animal health,
animal welfare and environmental
assurance in the production model.
Snyder said some large buyers are
becoming more concerned about all
these aspects of the product they buy.
Though Farmland has feed mills,
it does not require that producers on
the program buy all their feed from
the co-op. Milling costs are a major
advantage to large integrated
operations like Murphy Farms, he
said, which can mill feed at $2 a ton
less than smaller operators.
The reward for producers
involved in the program is a
marketing agreement in which
Farmland takes all their pigs, which
is necessary for the company to
prevent genetic leakage, he says.
Some co-op members argue their
genetics are better than the Triumph
genetic standard, he says. He tells
them "if your genetics are more
favourable to the consumer, we'll
pay you for that."
Producers were furious with
Farmland when it embarked on its
current program. In a move Snyder
calls "stupid in retrospect to be so
insensitive" the company sent out a
letter to all it's 2,600 producers
announcing its intention to move
toward an integrated production
model.
The result was anger and the
News
company had to back off, he says.
Since then it has been negotiating
agreements one contract at a time.
Still, he says, "we have to have that
traceability" and they had to be three
years ahead of the marketplace which
is "beating us on the head to have
this."
The challenge for the co-op will
be' to find ways to reward producers
who produce for branded products
like America's Best Pork while at the
same time using the co-operative
structure, Snyder said.
Snyder also updated producers on
the state of the U.S. pork industry.
There's been a fundamental change
in the industry, he said.
"Industrialization of our industry has
taken supply to a level that has
narrowed margins. The capacity to
expand and the resistance to contract
has created a situation similar to
poultry (where) there are extended
periods of supply exceeding
demand."
A lot of the new construction in
the industry in the last five years was
due to the fact a banker told the
producer he had to have a marketing
agreement of some sort to get
financing. As a result, packers
absorbed much of the stress from last
years price crash. There has been
very little liquidation. "I can almost
give you the names of the sow
operations with over 2,000 sows that
went broke," Snyder said.
He warned there are 25,000 -sow
facilities that currently have only
10,000 sows in them because of the
poor prices. Many are just waiting for
a sign that things are looking up to
"finish the job" and fill their barns.
"I kind of know the way these
large integrated operations think."
Snyder said. "We have a tremendous
potential to produce a lot of pigs with
very little incentive."
In addition, he said. U.S.
productivity lags behind Canadian
producers. The U.S. could reduce it's
sow herd by 30 per cent if American
production went from its current 16
hogs per sow to Ontario's level of 20.
"As producers, you are $10 a pig
cheaper than in the U.S. but you
better get that down another $5 right
away," Snyder warned.0
Get into quality
assurance, fast,
speaker says
If you haven't thought about
getting into the Canadian Qualit>
Assurance Program. get into it
quickly, a sales manager for a major
Canadian pork exporter urged perk
producers at the Competiti'ene„
conference at Shakespeare.
December 1.
Mike Miller. international ,ale,
manager for Quality Meats and
president of Canada Pork
International said that for Canada to
continue to grab a bigger share of the
export market "What we need to do
as producers and packers is to
guarantee our products are
wholesome and safe."
Countries like Japan are worried
about food safety. including
genetically modified organisms.
Miller said. Canada has moved
ahead of the U.S. into second place in
exports of pork (behind the European
Economic Community) with 600,00(
tonnes this year and expects a 10 per
cent increase in exports next }ear. he
said but If we want to continue
growth. we have to depend on
exports."
"I have a feeling that b> next .ear
it may be hard to market hogs in
Ontario if you don't have CQA."
Miller warned.
While 54 per cent of Canada's
pork went to the U.S. last )ear.
Quality Packers sent only 17.4 per
cent of its production south because
it wants high value-added product
sales. By contrast. while 16 per cent
of Canada's production went to
Japan, Quality Packers sent 21.4 per
cent of its production to Japan.
Quebec leads the w av with 51 per
cent of Canadian exports with
Manitoba second and Ontario third.
Miller surveyed international
markets for producers. Japan won't
likely increase its pork imports much.
he said. but because of chilled pork.
Canada's exports could increase b>
20 per cent to Japan.
The Korean market will probabl}
show a strong recovery h> the second
JANUARY 2000 41