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Industry Partners
Prairie Swine Centre is an affiliate of the University of Saskatchewan
Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.
Financial support for the Enterprise Model Project and Pork Insight has been provided by:
Managing Volatility
Posted in: Economics, Pork Insight Articles by admin on March 30, 2011 | No Comments
Volatility in feed and hog prices has led to an increase in producer costs. Going forward, it needs to be determined if consumers will pay more for the same products, and how to manage volatility. Understanding costs is a big part of managing volatility, and this can be helped by creating crush margins. Managing feed costs can be done by integrating grain production into the business, or through using strategy tools like the Chicago Mercantile Exchange. Reducing cost of production whenever possible, and managing risks in interest rates and human resources is also important. Other external factors, including currency and the lender, can also impact volatility management.
A Revolution in Pork Production
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Brazil is rising in the global pork market due to various non-technological and technological reasons, and despite some of its limiting factors. Brazil’s climate allows pork producers to use natural ventilation and light, and allows for two crops a year to be grown. Water and potentially arable land are also readily available in Brazil. The low pig density indicates there is a lot of possible expansion, and low labour costs can make the industry globally competitive. One of the technological advantages the Brazilian pork industry has is its chain organization: there is a high level of integration, and agribusiness companies generally handle coordination. Production has grown due to the high level of integration, and also because processors often work with both poultry and pork, and can use poultry resources like infrastructure and marketing. Brazil has also benefited from the increase in global communication and availability of knowledge. Crop production has increased, and swine genetics have been improving. Brazil also has the advantage of being PRRS free, the high use of ractopamine, and advancements in immunocastration. Brazil’s two biggest limiting factors are the lack of capital due to high interest rates, and the positive foot and mouth status limiting market access. Brazil has potential to continue to grow its industry and to increase its presence in the global market.
Demanding Consumers vs. Conventional Agriculture
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The UK pork industry is smaller than it was 15 years ago, but has high production performance and product differentiation. UK pork producers can only supply about 50% of the UK’s pork consumption, however careful marketing, industry lobbying, and welfare group support means the demand is still higher than for imported EU pork. Outdoor housing systems and banning gestation stalls have put the UK on the leading edge of sow welfare, and consumers within the UK recognize this. The Red Tractor logo and the RSPCA’s Freedom Foods help to indicate quality and welfare standards to consumers. As well, the use of the British pound sterling rather than the Euro means British pork is cheaper for processors than imported European pork. The availability of straw in Eastern England also provides affordable bedding for swine. All of this means that UK pork differentiates itself from competitors. The UK intends to remain at the top of swine welfare, and is beginning to introduce 5 measures to quantify welfare. Overall, UK pork has a strong position in its domestic market, and continually improving quality and welfare standards will help to ensure it remains there.
Lessons, Opportunities and Challenges
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The decline and variability of economic profit for swine producers has led to various strategies including increasing provincial and national demand, subsidies, and trade barriers for imported products. Since the pork industry exports much of its pork, the Canadian exchange rate can have a large impact on profits. Canada’s corporate tax rate is lower than the States, and expected to decrease, so businesses and investors are seeing Canada as an opportunity. There has been a decline in pork consumption due to health, animal welfare, and food safety concerns. As well, many people choose not to eat pork, or meat in general, due to vegetarianism, religious or other dietary restrictions, or the availability of meat substitutes. The Canadian pork industry produces more than Canadians can consume, so exportation is necessary. The industry and government should market more aggressively to the global market to increase exportation demand. Increasing global competiveness through creating a cheaper packer sector, coordinating Canada to be as competitive as America, and continuing technology development and utilization can help the Canadian pork industry increase profits.
Willowgrove Hill DHA/EPA Omega-3 Pork Marketing
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Willowgrove Hill produces Omega-3 enriched hogs to provide more nutritious options to consumers. They are the only pork product that is a functional food – a food with disease prevention or health promoting properties. Their ultimate objectives are to make their product desirable, sustainable, superior, and scalable. Willowgrove Hill enriches their pork with EPA and DHA omega-3s and Selnium through the swine feed, and the diets are also antibiotic free. The marketing and pricing turned into the most challenging aspect of putting a new product on the market. Some of the keys to marketing the product were to listen to experts, become credible, marketing to the right area (demographic), and make contacts. Later issues around packaging, processing, using Federal kill plants, POS issues, and further pricing issues also had to be tackled.
Changing Their Model: the Iowa Food Cooperative
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The Iowa Food Cooperative connects consumers and producers directly, and either can be a member. Customers use a software program to choose products, and then producers deliver the products to a store where they can be picked up. There are a variety of products available, all of which are made by the producer, and producers set their own prices. The system allows consumers to get the fresh, local products they want and producers to sell what they have available at a fair price.
Selling Pigs to Market Pork
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The Whole Pig Company delivers ¼, ½, or whole pigs to market pork to consumers as a healthy, quality, and delicious protein source. They strive to inform customers how to prepare pork, and why it is a nutritious choice. The small business uses various promotion and sample give-aways to amplify the company’s market presence. Networking and packaging that helps to sell the product remain important for their success.
Dealing with Post-Weaning Diseases – Post Weaning Disease Challenges and Management Solutions to Improve Production Efficiency
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The stress of the weaning process and the immune system transition can leave the nursery pig vulnerable to disease challenges. In order to control disease challenges in the nursery the type of pathogen, the clinical symptoms, the severity of the disease, the herd health status, and long-term impacts should all be understood. Intervention strategies can help reduce the impact, and can involve antimicrobial therapies, vaccination, and good production practises for standard challenges. For more serious or external disease threats, depopulation and repopulation can be used, or herd closure.
Dealing with Post-Weaning Diseases CSI-Swine: “Crime Scene” Investigation
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A veterinary investigation to solve a problem within a barn begins with accurate data collection. Questioning workers and using any documentation will be helpful in this process. Once there is data, an odds ratio can be performed to see if there is any association between two variables. A veterinarian can use the disease behaviour for profiling, and for viruses it is important to know if the virus is DNA or RNA, and enveloped or non-enveloped. Knowing the time frame of the disease will help a veterinarian decide to focus on looking for an agent or an antibody. Time also affects the course of the disease, and how many animals are affected. With more information, a more accurate decision on what to test for can be made, and what to do with the results.
The Nutrition and Economics of Feeding Entire Males Through the Grow-Finish Period
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Finishing entire males allows for better feed conversion, greater lean yield, and higher animal welfare. Historically, the problem with raising entire males was the possibility of developing boar taint when boars reach sexual maturity. However, immunocastration is a viable option for raising boars and preventing boar taint. Entire males will likely have higher amino acid requirements due to the increase in protein deposition, but feed efficiency is increased which will likely result in lower feed costs overall. Some progress has been made in genetically or nutritionally reducing boar taint, but the most effective method is immunizing against gonadotropin releasing hormone (GnRH). Immunocastrated males have a lower feed efficiency than entire males after the second dose is given (4-6 weeks prior to slaughter), but it is still above that of barrows. Restricting feed intake or dietary energy may be able to reduce fat deposition after the second dose. Immunized males may be practical option to utilize feed efficiency and protein deposition close to entire males while avoiding boar taint, resulting in increased financial returns.