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Pork Commentary: Hasta La Vista - The Other White Meat

by 5m Editor
9 March 2011, at 8:10am

US - In this week's Pork Commentary, Jim Long writes about the US market.

As long time readers of this commentary know we have thought for a considerable time that the value as an industry we have gotten for our check off dollars (over 1 billion dollars) was being limited by the continued use of the ‘other white meat’ slogan for pork.

The ‘other white meat’ programme has been used for 25 years, in that time pork has lost market share continually in the US domestic market. An advertising programme that is associated with market share loss is a failure, not one to be celebrated. Every time we read when one of the paid economist minions give some lame economic calculation that the ‘Other white meat’ programme had brought 100’s of millions of value it took our blood pressure higher than normal. Loss of market share does not equate to economic returns on an advertising campaign.

From a marketing perspective we could never comprehend why pork which sells for more money than chicken would want to brand itself compared to chicken. Never seen the following:

Mercedes Benz ‘The other Kia’
Saks 5th Avenue ‘The other Walmart’

The point is beef (red meat) sells for double that of chicken (white meat). Pork is red meat. Red meat is a premium product.

The great news in our perspective is the leadership of the National Pork Board has jettisoned “the Other white meat“ slogan and replaced it with ‘Pork: Be inspired’. We like to ‘be inspired’. It is positive and a needed change.

The new marketing campaign will use $11 million to roll out in March and April.

National Pork Board officials said, “After nearly 25 years, it was time to move on from the old message that compared pork to chicken and instead try to increase sales by focusing on the estimated 82 million Americans who already eat pork.“ (Research shows 28 per cent of Americans eat 70 per cent of at home pork consumption).

For the first time that we can recollect the National Pork Board is going on the offense rather than defense. Ceci Synder, NPB vice-president of marketing, said, “The overall goal is move sales of our product. We want to increase pork sales by 10 per cent by 2014. To do that, we needed to make a stronger connection, a more emotional connection to our product.“

We whole-heartedly support the change in marketing. You never sell anything without targets and goals. Chris Novak, CEO, the board of directors and the pork board staff should be commended for having the wisdom and courage to go beyond the status quo. They have recognized the need to enhance pork demand and are executing a plan. Most importantly it appears the National Pork Board once again is remembering where the money comes from, the producers of America. The producers deserve and should expect return on investment for their check off dollars. Increased sales and demand are the only measure of an advertising campaign’s success. We are inspired!

Markets

  • Iowa – Southern Minnesota averaged $81.98 lean per pound last Friday about $24 per head higher than a year ago. Although higher year over year with feed prices where they are there is no money being made for farrow to finish producers.

  • DTN Ag data had a chart last week estimating current US Gross Packer Margins at $30 per head. The three year average for this time of year is $15. Simple math an extra $15 per head 2 million head a week, $30 million more per week for the Packer industry. Time to buy stock in Packers. The good news – the Packing Industry should be financially strong and have money for continued modernization. The bad news – the $15 per head difference could be in producer’s pockets. As we go forward we expect lower seasonal hog numbers (closer to 2 million a week) will have packers chasing hogs that will lower packer margins.

  • We are still not seeing sow herd expansion. There is lots of discussion but no action that we can ascertain. In our opinion weekly sow marketing’s of around 58,000 indicates a breeding herd that is holding steady. Hog to Corn Ratios hovering around 13 to 1 will never lead to expansion.

Summary

Pork: Be Inspired we believe is a positive step for our industry. Producers currently trading dollars, packers making good money; we don’t see expansion happening. Finally lean hogs are $1.00 for the summer. We expect global pork demand will strongly pull US pork in the coming months.