The impact of low hog prices high feed prices and a Canadian dollar that has moved from 65¢ to the US dollar to over $1.02 can be seen in the direction of production. The Canadian breeding herd inventory is the lowest since October 2002.

22,000 fewer breeding animals and 450,000 fewer pigs. A dramatic change and a trend we see continuing under the current market conditions.

The province with the smallest decline is Manitoba. The province with the highest productivity and the most settled packer situation. In Alberta, Ontario and Quebec high feed prices, lower hog prices and packer commitment and financial issues are leading to a greater level of liquidation. What we are seeing is liquidation in Canada with a 10,000 sow decrease last quarter. We expect the Canadian liquidation to continue, with the added dynamic of more Canadian producers looking at moving small pigs to the US for finishing with the hope that they will lose less money (current market scenario).

Independent Meats and Salmon Creek Farms

Last week, we had the opportunity to visit Twin Falls, Idaho and Independent Meats while attending and speaking at a symposium held in conjunction with Salmon Creek Farms Marketing Association.

Independent Meats is a slaughter plant and processing facility that handles a few thousand hogs weekly. All hogs are provided by the Salmon Creek Farms Marketing Association (independent hog farmers). All hogs that Salmon Creek provides to Independent meet stringent meat and carcass quality standards, feed a specific ingredient and nutrition package and maintain high health standards with minimum drug usage, under a strict audit system.

The pork is marketed to high-end food service, white table cloth restaurants and premium export markets. The pork is sold for a significant price over commodity pork. What is unique is the discipline in their criteria protocol. Independent doesn’t just pay lip service that they will buy only hogs with high pH, carcasses with the colour, intramuscular fat, primal size they desire. You cannot get a supply contract unless you use swine genetics that meet their criteria. It’s a short list, which genetics qualify (the most inheritable trait for swine is carcass and meat).

At the symposium, which was attended by all the producers that are members of Salmon Creek, there was a panel made up of a chef, foodservice suppliers and retail suppliers. It was fascinating to hear the people on the direct firing line to the consumer explain to the producers the advantage of the meat quality that the Independent/Salmon Creek program is providing to their customers. They all explained in great detail the tremendous feedback that they are receiving because these unique pork products have colour, packaging tenderness, juiciness and flavour that appears to eclipse what they termed commodity pork.

The interaction between the producer and direct-to-consumer marketers was reciprocal in its benefits. We saw producers getting feedback that their efforts to make a better product were being appreciated in the marketplace. The producer got to hear the issues that affect pork movement long after their hogs land at the packers. The meat movers benefited to meet and talk to and hear the issues of the producer. They told us that they were leaving with a positive understanding that there was more than a story with this pork but the reality of program being executed. We came away with the belief all pork producers would benefit as would the meat movers to such direct interaction. Each understanding the other’s circumstances, but all united with the belief that a better product enhances demand and prices. Basic business isn’t it.

We are struggling as an industry for profitability. The tonnage of pork the last few weeks is 6% higher than it was last year. Lean hog prices are not a disaster considering the huge supply but there are few, if any producers making money. Some are losing $30.00 per head. Exports are increasing, benefiting from a historically low U.S. dollar. We have as an industry spent one billion dollars in check off to the National Pork Board and NPPC over the last twenty years to help build brand and demand. Unfortunately, US per capita pork consumption is the same as it was twenty years ago. In the same time frame beef, poultry and fish have seen per capita increases. Pork has lost market share. When something is not working, we have to revisit the plan. What we saw at Independent/Salmon Creek’s Symposium was a revelation. Producer-Packer-Meat Mover all in the same room, working to be on the same page. The discipline to execute a quality pork plan – not just tell a story.

We wish to thank all involved for the hospitality that we received in Twin Falls. Patrick Florence, visionary and owner Independent Meats, Beth Patten, manager Salmon Creek Farms Marketing Association and Ted Ogden, Head of Procurement, all producers and Independent employees, stakeholders in a quality product program.

“A change is something people do, a fad is something people talk about”