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Finding 'Canadian way' key to managing pork industry growth

by 5m Editor
19 January 2006, at 12:00am

BANFF - Taking the best of U.S. and European models as part of a uniquely Canadian approach offers the best way for the country's pork industry to capitalize on dramatic growth opportunities.

Finding 'Canadian way' key to managing pork industry growth - BANFF - Taking the best of U.S. and European models as part of a uniquely Canadian approach offers the best way for the country's pork industry to capitalize on dramatic growth opportunities.

That's the recommendation an industry analyst delivered in a keynote session at the Banff Pork Seminar. The three-day seminar, Jan. 17-20, attracted approximately 850 pork producers, researchers, extension and education specialists, as well as agribusiness service and supply representatives.

"Clearly, there is much to be gained by adopting the efficiencies and the systems approach of the U.S. integrated model," says Jerry Bouma of Edmonton-based Toma & Bouma Management Consultants, a veteran of several major pork industry projects. "But the European co-operative model has advantages for managing environmental risk and enabling the distribution of margins across the entire supply chain."

Canada would benefit by taking a balanced approach, says Bouma. "The situation calls for the most 'Canadian' of approaches - namely taking the best of both systems and responding with a uniquely Canadian solution."

The growth potential for Canada's pork industry is dramatic, particularly in the west, he notes. The country is already the world's largest pork exporter, but its hog densities remain very low in comparison to many hog production regions around the world.

"Canada has considerable expansion capacity," says Bouma. "For example, hog population density in the Netherlands is 38 times greater than in Alberta. Dupin county in North Carolina has a larger hog population than the entire Alberta inventory and a density factor that is 183 times greater."

The market opportunity is also strong, he says. "Canada stands in an enviable position as the largest production surplus region in closest proximity to the world's largest and fastest growing food deficit region - the Pacific Rim."

While the prospect for future growth is substantial, developing the right structures and strategies to manage that growth is critical, he says.

In an analysis of the major organizational models, Bouma observed the current U.S. model has been led by the emergence, and now dominance, of large scale integrated pork production systems. This has made the country a pork powerhouse but has also brought challenges.

"The changes of the past 20 years have transformed the U.S. into one of the most competitive pork industries in the world," he says. "However, the sheer scale of U.S. operations and growing public discourse is generating much concern regarding the impacts to the environment. They have also generated concern for rural communities that see their futures turned over to outside interests."

The European co-operative model is better at looking after environmental and community interests, he says. It also distributes benefits more equitably along the supply chain. But this model has more difficulty adjusting to rapid change and attracting investment capital.

A key third model for Canada to consider is an emerging collaborative model - one that takes advantage of supply chain alliances known as "value chains."

"Ideally, value chains combine the best features of both integrated structures and co-operatives," says Bouma. "Because of some of the practical realities, value chains to date have largely been limited to small scale niche opportunities, but they do offer great advantages in the right situation."

The Banff Pork Seminar, held annually since 1972, is one of the premier pork seminars in North America. The Seminar is co-ordinated by the Department of Agricultural, Food and Nutritional Sciences, University of Alberta, in co-operation with Alberta Pork, Alberta Agriculture, Food and Rural Development and other pork industry representatives from across Canada. Full program and proceedings of the 2006 Banff Pork Seminar are available on the new Seminar Web site, www.banffpork.ca.

Source: Banff Pork - 20th January 2006

5m Editor