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July 11, 2001
Dear Dale Miller:
It seems that from the last pig crop report we may have a period of at least reasonable profitability which probably will engender pressure for expansion.
Looking at this cynically, it is doubtful that hog producers can tolerate profitability for very long. They will get the urge to expand. So you will need to turn up the decibels pointing out that there is little price elasticity due to the limited slaughter capacity, and return on investment in new production will likely be negative. The question should be posed to the industry: Aren't you happy with current profitability?
Why expand and lose money?
Perhaps you may be accused of excess pessimism, but that's perfectly fine. Please continue doing the industry this favor because industry-wide optimism kills profitability. Every time.
I very well remember the great optimism of East Asian ‘opportunities’ in 1996-97 instigating a building frenzy with a lot of outside investors.
If producers seem to have money burning holes in their pockets, perhaps an effort should be made to encourage them to invest up the food chain instead of expanding production. While this may seem a dubious proposition, directing money in this direction ties up capital that might otherwise go into expanding production, thus keeping production profitable even if packing returns aren't so great. Furthermore this guarantees shackle space for producers that cannot suddenly be bought out and shut down.
vPast history of packing may have seen poor returns. However it seems that extrapolating past trends into the future can sometimes be quite erroneous. Trends have a habit of suddenly reversing. Current limited capacity may mean reasonable profitability in the future.
Cooperative alliances could be made with producers owning packing and further processing facilities with experienced packing and food processing companies operating them.
Thanks for listening.
May 28, 2001
Dear Mr. Miller:
I just read with interest "From My Perspective" in the May 15 issue. I flew from Haiti to Miami in January and told the officials in Miami that I had agricultural products (we brought back some seeds and soil for a science experiment for my daughter), and had been working with a veterinarian. Our luggage was x-rayed and we were sent on our way to infect the country.
We flew from Chicago to London in March, then connected to Madrid, Spain without leaving the airport. When we arrived in Madrid, we walked across carpet that was damp with disinfectant. We flew back the same way in April and had no such requirement in London. When we arrived in Chicago, I expected something spectacular, since I had been reading about all of the increased concern regarding FMD. Signs were posted saying something to the effect that if you had been on a farm, let them know. There was also an announcement to that effect. There was no mandatory disinfectant, inspection relied only on the truth of the individuals arriving.
If we are going to keep these diseases at bay, we are going to have to be much more demanding of visitors and returning citizens. We seem to have millions of dollars to combat problems once they occur, but nothing to keep them from occurring. I should not be so surprised, my insurance company would not cover immunizations that I took prior to my Haiti trip to keep me from getting sick. You can bet they would have covered me if I had gotten sick.
We still live in the best country in the world, but I sure question some of the short sighted things we do.
May 23, 2001
Dear Mr. Miller:
As a North Carolina hog farmer, I was bothered to read the following in the May 15, 2001 issue of National Hog Farmer:
"Smithfield's $50 million in contributions to research alternative manure management technologies at North Carolina State University isn't acceptable to Kennedy."
Please note that the agreement provides for no such sum. Rather, there has been a contribution of $15 million by Smithfield for the study of Environmentally Superior Technologies. The $50 million dollar amount is to be collected is as a per hog payment of one dollar for each hog in which the companies have had financial interest in North Carolina, not to exceed $2 million per year for 25 years.
The specific purposes of these funds are to include the following:
"The funds will be used to enhance the environment of the State, including eastern North Carolina, to obtain environmental easements, construct or maintain wetlands and such other environmental purposes, as the Attorney General deems appropriate. Portions of the funds, not to exceed a total of $2 million dollars, may also be designated as grants to the State to defray the costs incurred by the State as a result of this Agreement, including permitting and compliance assurance, in the discretion of the Attorney General."
This last quote is taken directly from a copy of the Agreement, Section D., page 14.
As you can clearly see, this leaves a lot of latitude for the AG to interpret and disperse this huge sum as he or she deems fit. I have my own theories as to how this money might be spent.
The Agreement is an interesting document. In all fairness, I must note that a lot of people make the same mistake as your associate editor did in constructing the article; however, I would hope that you would research the inaccuracy and correct in it future accounts of the Agreement.
Thanks for your hard work,
Rich Square, NC
April 30, 2001
I want to compliment you, your staff and the National Hog Farmer for your coverage of the output of producer checkoff investments. Your latest "blueprint series" is especially near and dear to me.
As a business-oriented producer, I have been involved in the Production and Financial Standards initiative. My role has been twofold. One, as a producer leader that made a decision to invest in the initiative; and second with my family served in pilot testing the different aspects of what producers today can access.
Unequivocally, I can personally say that this checkoff-developed tool is one I will depend upon to keep me competitive and in pork production in the future. This, as well as many other checkoff programs that producers take for granted, is here for our benefit. It is incumbent on us to use and/or participate in them.
Thanks for your role in helping to disseminate the information.
President, National Pork Board
April 2, 2001
I’m reading your March 15 issue and pleased that you have spent so much time and space on the manure problem. Those of us in the manure treatment and handling side of the business appreciate your attention to this important issue.
Of concern to all of us in the manure business is the article on page 16, "Pit Additives Score Low on Odor Test." We think the headline should read "NPCC and Purdue Test Protocol Proves Flawed by Being Unable to Confirm the Viability of Farm Proven Pit Additive Products."
We live in a world of multiple realities; the test looked at the products through a very narrow window; the other reality is that these products have been out in the market doing their job and solving farmers manure problems with satisfaction for many years. I have no doubt that if Joe Vansickle were to interview the companies that participated in the "test" he would get a very different story than the one you have printed.
I considered joining the test, but after talking with a friend who was familiar with the test protocol, I decided to decline. He predicted that the test would not reflect the true value and results of the products. How right he was and how glad I am that I decided against participation.
I, and many other people, believe that microbial pit additives are the best, most economical, most environmentally friendly and easiest to use method of treating the three big manure problems. Microbes reduce odor and solids while digesting nutrients to build a gentle fast acting fertilizer. No other manure solution, that I’ve seen, treats all three problems for so little money. In fact, I can’t think of another solution that treats all three problems at any cost.
My hope, and I’m sure I speak for all the producers in the manure treatment industry, is that you would interview the participants in the study and hear their side. It will tell a very different story that will validate the true worth of additives. This is too important an issue, to the industry and to the country, to have one-sided erroneous information accepted without challenge. My hope is that you’ll accept this challenge.
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