Pork Producers Prepare to Tackle 2013 Budget

5 September 2012, at 9:29am

US - In the midst of some of the most difficult market conditions in years, more than 50 pork producers will meet in Des Moines on 5 to 6 September to draft a 2013 budget for the National Pork Board that focuses on continuing to build demand for pork while addressing several challenging production issues.

The producers from throughout the country who make up the Plan of Work Task Force will continue a planning and budgeting process that began earlier this summer when producer-led committees identified specific action steps designed to meet the goals in the board's strategic plan. Those goals include:

  • Refresh and reposition pork's image to increase domestic and international consumer demand.
  • Protect the rights and ability of US farmers to produce pork in a socially-responsible and cost-competitive manner.
  • Pursue strategies to enable US pork producers to remain highly competitive, long term, on a global basis.

Based on revenue projections from the Pork Checkoff in 2013, the board has established a budget target of $67 million, which is approximately 5 percent below the 2012 budget. Revenue forecasts are lower for 2013 because of projections that hog prices will be slightly lower in 2013 than they were this year. National Pork Board revenues come from the Pork Checkoff, which collects 0.4 percent of the sale price when a hog is marketed.

"The impact of the widespread drought this summer on the 2013 hog market will be on the minds of the producers working on this year's budget," said Conley Nelson, an Algona, Iowa, farmer and pork production executive who serves as president of the National Pork Board. "We expect to see relatively good market prices for our pigs, but the drought has significantly depleted the corn and soybean crops that are the foundation of hog diets. As a result, we're going to have feed and other costs that will make it difficult for most producers to be profitable in 2013.

"The challenge as we put together our next budget," Nelson said, "is to continue to support our successful new Pork® Be Inspired® marketing campaign and our growing export markets, while at the same time doing all we can to help pork producers prosper under difficult conditions. There also are proposals in the budget for important research projects, and the board believes we must continue to support the industry's We Care initiative and other efforts to build consumer trust.

"We have to do all that with a slightly smaller budget than our current one. So the producers coming to Des Moines to draft a budget for the board's consideration in November have a tough task. There is going to be some interesting debate among producers."

The producer committeesthat oversee foreign and domestic marketing, science and technology, and producer education and services each make budget requests for specific tactics. The Plan of Work Task Force will be asked to align the committees' spending requests with the board's budget target.

The producers on the Task Force are selected to represent the diversity of US pork production. The group includes all 15 board members as well as representatives of the board's nine producer-led committees and pork producers who represent differing geographic regions and production styles. The group also includes a representative of pork importers, who contribute to the Pork Checkoff.

The final step in the 2013 budgeting process is scheduled for November, when the National Pork Board meets to review the Task Force recommendations. The US Department of Agriculture has final budget approval.

The National Pork Board will meet on Tuesday and Wednesday, ahead of the Plan of Work meeting, to prepare for the meeting and to handle a number of business items. The board also will focus on the drought and its impact on markets and on-farm production. The board's staff already has been working with producers to deliver information about feed and water management. Board members will discuss what else it can do to help producers.

Also on the agenda, the board is expected to review its efforts to build stronger relationships with its food channel partners; review its policy on maintaining reserve funds in the budget and discuss the possibility of revising its Environmental Stewards Awards program.