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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