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Pork producer tells competitors of industry turnaround

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Published: February 13, 1997

The Alberta Cattle Feeders Association let a stranger into its midst.

Ken Doyle, an Illinois pork producer, explained how his industry made a turnaround from growing fat pigs to long, lean protein-producing machines.

A new attitude in the American industry has transformed the United States from a pork importer to a net exporter in less than 10 years, said Doyle. The new strategy promotes expansion from 100 million hogs slaughtered a year to a five-year plan to kill 110 million annually.

Doyle said the new attitude is invigorating because it raises his industry to a sophisticated position internationally.

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“We’re in the consumer business. I don’t produce pigs,” said Doyle.

From his Hickory Grove Pork Farm at Gillispie, Ill., he sells about 12,000 market hogs.

As far back as 1989, when Doyle was a producer member on the National Pork Producers Council, it was agreed something had to be done to improve the nation’s pork industry. Pork was rejected as too fat but under this new program it has since emerged as “the other red meat.”

To reform, the pork council worked with the American Meat Institute which represents all meat processors, government and the Chicago Mercantile Exchange.

“We involved a lot of people to make this happen.”

One of the broadest innovations was a pricing scheme called the fat-free lean index, which is a value based marketing system. It considers carcass size, weight and percentage of lean meat as well as what the producer should be paid for each hog based on value, rather than total weight.

It now applies to 80 percent of the hogs killed in the United States. Base prices for the grid are calculated through the U.S. Department of Agriculture figures and bids from packers, analyzed by an independent accounting firm. The identity of each packer is secret.

These changes are in line with the Chicago Mercantile Exchange’s switch this month from a live hog contract to a carcass contract. This provides an international price.

To further promote improvements, packers use individual carcass identification systems. Farmers receive reports on how each of their carcasses graded and fit into the grid but the system isn’t advanced enough to trace pedigrees.

The genetic base to produce leaner hogs is spurred by a widespread artificial insemination program. Next year, 30 percent of all American sows will be artificially inseminated.

To bring about such sweeping changes, Doyle favors vertical co-ordination among packers, processors and producers, rather than vertical integration such as exists in the poultry business. For example, Tyson Foods in the U.S. controls 35 percent of the American poultry industry.

With vertical co-ordination there are more decision makers and more flexibility because there are more people involved in running the industry on a co-operative basis. Doyle said the beef industry should move in this direction as well.

About the author

Barbara Duckworth

Barbara Duckworth

Barbara Duckworth has covered many livestock shows and conferences across the continent since 1988. Duckworth had graduated from Lethbridge College’s journalism program in 1974, later earning a degree in communications from the University of Calgary. Duckworth won many awards from the Canadian Farm Writers Association, American Agricultural Editors Association, the North American Agricultural Journalists and the International Agriculture Journalists Association.

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