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Despite restrictions, U.S. pork performing well in Oceania

Despite restrictions, U.S. pork performing well in Oceania

While Australia and New Zealand are well-known for their agricultural exports, the Oceania region is a thriving destination for imported pork. The United States has successfully captured a significant portion of this business, as Australia is currently the sixth-largest single-country destination for U.S. pork.

Through August, exports to Australia totaled 43,639 metric tons, up 8% from the same period last year, while export value was down 3% to $120.1 million. Exports to New Zealand were 20% ahead of last year’s pace in volume (4,694 mt) and 4% higher in value ($13.6 million).

U.S. pork is subject to significant restrictions in the region, with exports to Australia limited to cooked and processed pork products and boneless raw materials that must be shipped directly to an approved facility for further processing.

No fresh/frozen U.S. pork is allowed at the retail or foodservice level in Australia. Access to New Zealand is similar, although New Zealand does allow fresh/frozen U.S. pork in consumer-ready packages of 3 kilograms or less, and accepts both bone-in and boneless raw materials for further processing at approved facilities.

Even with these restrictions in place, the U.S. pork industry has built a significant presence in Oceania, with exports to the region peaking in 2012 at 76,801 mt valued at $236 million. Exports trended downward in 2013 and 2014 before regaining momentum last year. In 2016, exports are projected to reach 69,500 mt — not quite back to the peak level of 2012, but definitely on a positive trajectory. U.S. share of the imported pork market has also increased in 2016, climbing from 32% in 2015 to 37% in Australia, and from 10% to 12% in New Zealand.

With support from USDA Market Access Program and the Pork Checkoff, the U.S. Meat Export Federation recently promoted U.S. pork products at two major food exhibitions in the Oceania region.

Foodservice Australia
Reaching cafés, quick-serve restaurants and catering companies was the main objective at Foodservice Australia, which attracted more than 5,000 buyers to the Royal Hall of Industries in Sydney. USMEF participated for the first time this year, using the opportunity to showcase U.S. pork’s advantages over competitors.

Buyers attending Foodservice Australia gather at the chiller case filled with U.S. pork products.

“This event is smaller in scale than Fine Food Australia — Australia’s largest food show – but the focus is on buyers from a fast-growing part of the foodservice industry,” says Feon Wong, a manager in USMEF’s Singapore office. “It’s an aspect of the market that is a good fit for U.S. pork, and we stressed the advantage of U.S. pork over the countries that we are competing with in the region.”

USMEF’s display featured a chiller filled with a range of U.S. pork products, including precooked bacon, sliced pepperoni, pulled pork with barbecue sauce, braised pork belly, cooked riblet patties with barbecue sauces and pork meatballs. Recipes for the dishes and other ideas for U.S. pork were shared with visitors, along with tasting samples.

“There was a lot of genuine interest from buyers at Foodservice Australia and we received many favorable comments, especially on the braised pork belly and riblet patties,” says Nicole Dehnert, a representative for Colby International, a USMEF member and Colorado-based export management company with an office in Australia.

U.S. pork tasting samples were distributed to prospective buyers at Fine Food New Zealand.

Fine Food New Zealand
USMEF also recently promoted U.S. pork products at Fine Food New Zealand, an international showcase held every other year in Auckland. USMEF capitalized on U.S. pork’s flavor and quality to attract the attention of attendees, distributing samples of boneless ribs, pulled pork, glazed pork patties, pork meatballs with Portobello mushrooms, pepperoni and pre-cooked bacon.

Sabrina Yin, USMEF’s Singapore-based director who oversees promotional activities in Oceania and Southeast Asia, says the opportunity to reach key buyers in New Zealand is increasingly important as the market is attracting a growing number of competitors.

“In the New Zealand market, the most remarkable gain in share has to be Spanish pork,” she explains. “Spain was a small player in 2014 at about 300 mt, but last year its exports to New Zealand soared to more than 2,500 mt. In 2016, Spain’s presence has continued to grow, and it is now the leading pork exporter to New Zealand.”

Yin notes that Fine Food New Zealand is a very important venue for establishing new business relationships.

“This year we were able to communicate directly with foodservice operators, retailers and food distributors,” she says. “These relationships help us to better understand the challenges and product needs of end users, while also allowing us to strategize our future activities.”

Data sources: USDA, Global Trade Atlas and USMEF projections 

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NPPC concerned about rules on livestock contracts

The National Pork Producers Council today expressed concern about USDA regulations on the buying and selling of livestock and poultry. USDA today sent to the White House Office of Management and Budget for review three rules — the “Farmer Fair Practices Rules” — that, according to the agency, would “help balance the relationships between livestock producers, swine production contract growers, and poultry growers and the packers, swine contractors, and live poultry dealers with whom they interact.”

Issued by USDA’s Grain Inspection, Packers and Stockyards Administration as an interim final rule and two proposed rules, the regulations are supposedly revisions of rules first proposed by GIPSA in 2010 to implement provisions Congress included in the 2008 farm bill.

The 2010 rules, however, went well beyond the congressional mandates of the farm bill and would have had a significant negative effect on the livestock industry, according to an analysis conducted by Informa Economics, which found they would have cost the U.S. pork industry more than $330 million annually. (An update of the analysis found that today it would cost the pork industry $420 million a year to comply with the rules.)

As a result, tens of thousands of comments, including 16,000 from pork producers, were filed in opposition to the 2010 rules, and Congress several times included riders in USDA’s annual funding bill to prevent the agency from finalizing the regulations. But no rider was included in the fiscal 2016 agricultural funding bill, and USDA earlier this year indicated it would move forward with new rules.

“Pork producers are concerned that, like the 2010 proposed rules, the ones sent to OMB would have a negative effect on the pork industry, from producers to packers and ultimately consumers,” says NPPC CEO Neil Dierks. “While the specifics of the actual rules are not yet clear, we’re worried about their impact on the ability of producers to secure financing and to innovate and about them potentially leading to greater vertical integration without offering positive advantages to the industry and consumers.”

Of particular concern, Dierks says, is the interim final rule on the “scope” of sections of the Packers and Stockyards Act related to meat packers using “unfair, unjustly discriminatory or deceptive practices” and giving “undue or unreasonable preferences or advantages” to producers. While NPPC has yet to see the language of that rule, the 2010 version was overly broad, and most of the cost of complying with the 2010 rules would have come from that regulation.

Agriculture Secretary Tom Vilsack, in a letter sent this week to NPPC and to other agricultural organizations, said the interim final rule will “establish our interpretation of the (PSA) statute, which will then be entitled to judicial deference.”

NPPC’s fear is that the interpretation apparently will be that producers no longer will need to prove that a meat packer’s action injured or diminished competition in a “marketplace.” They only will need to show that a practice was “unfair” to them or that an “undue” or “unreasonable” preference or advantage was given to another producer or producers.

The Senate considered and rejected such a “no competitive injury” provision during debate on the 2008 farm bill. Additionally, eight federal appeals courts have held that it must be proved that competition in a marketplace was harmed for an action to be a violation of the PSA.

“The interim final rule will create legal uncertainty for producers and packers,” says Dierks, who pointed out that because the regulation is “final,” it will become effective as soon as it’s published in the Federal Register.

USDA will accept public comments on the interim final rule and on the two proposed rules once they are published in the Federal Register.

Southeastern U.S. hog industry surveying Matthew damage

Eyes of the nation have been fixated on the southeastern United States in the aftermath of the Hurricane Matthew that inundated that area with up to 18 inches of rainfall, along with the damage from high winds.

The latest count has 43 human deaths in the United States due to Hurricane Matthew, making the loss of homes and businesses trivial.

Southeastern U.S. agriculture has also been impacted, and the North Carolina Pork Council issued a statement by CEO Deborah Johnson on Oct. 13 saying “Hog farms across eastern North Carolina are continuing to assess the damage caused by Hurricane Matthew and the extensive flooding brought by the storm. There are more than 2,100 permitted hog farms in North Carolina and the vast majority of them faced tremendous challenges caused by the storm. Fortunately, the damage caused by the storm up to this point has been relatively minimal.

“There remains a serious threat to life and animals caused by additional flooding, and the pork industry continues to work tirelessly to protect hog farms, animals and the environment.”

In her statement, Johnson squelched previous reports by environmental groups exaggerating the impact the storm had on manure storage lagoons across the state. Johnson indicates that 11 hog farms in eastern North Carolina have been inundated with flood waters, and in her statement explains the difference between a lagoon breach and one that is inundated. A breach is a failed lagoon, as where one that is inundated remains intact. “The floodwater runs over the lagoon and carries away only a small portion of wastewater that is heavily diluted. Most of the wastewater remains in the lagoon and the environmental impact is greatly minimized.”

Smithfield Foods, headquartered in Virginia, has hog farms and processing facilities in North Carolina and Virginia, and issued a statement saying “employees are working around the clock to determine the impact” the storm had on farms and processing facilities.

In the statement, Smithfield reports that none of the plants in North Carolina or Virginia suffered substantial damage, but the flooding was making hog and employee movement difficult. Virginia facilities were operating at full capacity, while the North Carolina processing facilities were operating at a reduced rate. Smithfield anticipates having those facilities back to full production next week.

As of Thursday afternoon, Smithfield reports that none of the company’s farms suffered a breach or lagoon failure, though there was one report of flood waters rising into a lagoon on a contract farm.

“This remains a serious, life-threatening situation, and our top priorities continue to be the safety and well-being of our employees and the care of our animals,” the Smithfield statement concludes.

North Carolina pork producers have lost about 3,000 hogs due to Hurricane Matthew, down from the 21,474 that died as a result of when Hurricane Floyd hit the region in 1999.

The North Carolina Department of Agriculture and Consumer Services has activated its toll-free hotline to help farmers affected by Hurricane Matthew connect with resources that can assist with recovery. Farmers who have an agricultural emergency can call 866-645-9403.

Keep eye out for light at end of pork tunnel

Keep eye out for light at end of pork tunnel

Kevin Estrem currently farms with his brothers, sons and nephews in their corn, soybean and hog operation near Nerstrand, Minn., about an hour drive south of St. Paul.

The family is also involved in a sow unit elsewhere in Minnesota. The Estrem Farms hog barns near Nerstrand are currently used to contract finish hogs.

Despite the current market situation, Estrem, in his second term as Minnesota Pork Board president, remains upbeat about the future in the swine industry.

National Hog Farmer: How do you keep the next generation of Estrems excited about the swine industry?

Kevin Estrem: You have to be upfront honest with them, that we don’t make a lot of money. We handle a lot of money, but you don’t make a lot of money. We’re in it for the enjoyment of actually producing food — people need food, there’s always going to be demand there. There are long hours and hard work, but I think just being your own boss and working with family members is great. You can’t paint a rosy picture because of the times we’re in now, but we have had some fantastic years. My enjoyment is producing a good safe sound food for people all over the world. As Minnesota Pork Board president, I see the rewarding value of getting our product out there in front of people. I think the next generation sees that as well, that there will continue to be a big demand for U.S. pork.

NHF: Why is it important to be involved in pork organizations?

Kevin Estrem

Estrem: This is my sixth year of being on the Minnesota Pork Board itself, and the great honor of serving as president for my second year. Pork Board is funded by Checkoff dollars that are spent for research and development, promotion and education. Those are things that I am very involved with and have been for the last 20 years. We really need to keep educating people on how we raise our pigs. My goal is not to blast it down their throats that “this is the only way we do it, the right way to do it”. My idea is to let them ask the questions and answer it in a civil way. Not that they want to hear everything, they just don’t want it shoved down their throat.

Promotion and image are big things for the Minnesota Pork Board members, we get out there and promote our product, again how safe and easy it is to cook. A lot of people at the Minnesota State Fair this year, even though the suggested cooking temp has been 145 degrees internal versus 165 for three to four years now, I think this year at the state fair only one in 100 knew how to cook pork. We really have to get out there and promote our product, and our board members are really passionate about that.

Research and development is another thing that we’re involved with, and we’re working with the University of Minnesota, as well as South Dakota State University and Iowa State University on how we can do more research. When I came on as president, my theory was that if you raise 10 pigs or 10,000 pigs, I don’t care. As long as you’re on the same page of how we raise pigs and you are Pork Quality Assurance certified, I will represent all of you. We still have to have research for the small farmers as well as the intermediate farmers. Even though the larger operators may have their own research, they do look to the research that we are funding and what the universities are doing, so it does help us all. And for the smaller operators who don’t have their own research and have nowhere else to go, otherwise problems would prevail if the small farms can’t do the research and all of a sudden we’re going to have problems out there that we don’t even know about and that’s going to affect the entire hog industry in the long run. Let’s say a virus breaks out and they don’t do anything about it; pretty soon the neighbors and everybody else has it too.

NHF: How has promotion changed over the years?

Estrem: Twenty years ago when I started promoting, I would go into schools and talk to young kids about farming in general. As the years went by, I updated it to this is how we raise our products. My goal on educating and promoting was to just tell the kids how we do it. It was surprising the positive attitudes they came away with, “well we didn’t know that.” Everyone loves bacon, so you use bacon as the highlight to explain things. These kids go home and talk about what they learned in school, and all of a sudden I’m getting calls back from parents with questions and not in a negative way. It made me feel good that, hey, people really care about how we raise our pork and how we raise our crops. If you tell them the truth straight out, that’s what they want to hear. They might not always agree with you, but you don’t argue with them. Arguing gets you nowhere.

I think it’s cool because when we have our question and answer sessions, I’ll have vegetarians come up to me they’ll want to start an argument. They’ll come right up to me, and say “I’m a vegetarian, I don’t eat meat.” I tell them, that I want to know what they eat. “Well, we eat vegetables, and we eat this and eat that.” And I tell them that I think that’s fantastic, because I raise all that. I grow them on our farms. It’s interesting because they’re not expecting that reaction. I don’t care what people eat, because all of it came from a farm of some kind.

Years ago it was what do pigs eat, how big do they get? Now it’s why do you raise them in your buildings? Why are they in climate control? Why do you have them in pens? You can tell even the younger generation is being told how farmers raise their livestock. It’s something that has to be talked about.

When people ask why we have our pigs inside, I tell them that our buildings are climate-controlled so in the winter our buildings are 68 degrees, and in the summer they’re 72-75 degrees. We can cool them down and warm them up. Our concern is in our area we have a lot of coyote and fox, and they like bacon. That’s a concern. If we’ve got pigs running around outside, the coyotes will come in at night. Also bald eagles, a beautiful bird, but they will prey on any animals. They’ll swoop down and take a pig. We need to protect our animals from Mother Nature. If you can tell them stories like that, you can get across some understanding. You can use the same reasoning for using stalls for farrowing versus open pens, it’s all for the protection of the piglets, as well as for the workers in the hog barns. Sows can get defensive with their piglets. You’re not going to convince 100% of the people, you just need to keep educating. Once they hear that story, they’re like, “hey, that makes sense.”

NHF: Other than overcoming the public’s perception and fears of how pork is being raised, what are the biggest challenges ahead for pork producers?

Estrem: No. 1 is our prices. On the financial side when you have $41 December hogs this year, and they climb up to $65 in May, there’s still not much of a break even point there. On the grain side, it’s helping things as we’re buying cheaper inputs when you’re feeding $2.76 corn, so that’s helped the bottom line.

We’re seeing a little bit of expansion going on in the state, more remodeling and people just holding their status quo. With the three new packing plants coming on board in 2017 in the Midwest, I guess those three are already full to capacity as far as our statistics go. We’re going to be putting more pork on the market, so we’re going to have to keep promoting and educating our public that pork is a safe, quality product that is high in protein. We also face the challenges with the exports; we need to get our markets back up.

I did a little look back in history in retail. Bacon over a one-year period has only dropped 68 cents a pound for the retailer, spare ribs are the same price, hams are actually a little bit higher than a year ago. Your ribs and loins are staying the same price, so even though our on-farm price has dropped, it really hasn’t dropped for our retailers and restaurant operators. If they would drop their prices, we could maybe clean out our cold storage and hopefully make more of a demand. That’s the challenges we face on the financial side.

Health wise, that’s going to be ongoing no matter what. We all face the challenges of health in our pigs no matter what we do, no matter what we try. It seems like there’s always something going on. Yes, we do have things under control, but yet there are still the challenges of the unknown that we face. It’s the what-ifs that we don’t know, but we know it’s going to happen. We’re always facing that.

Challenges with the consumers are that when they hear something, they’re going to believe it, and until they talk to a real farmer, it’s going to be hard to change that.

NHF: Do you see any challenges that Minnesota hog producers face that may not be at play in other states?

Estrem: Close to 50% of our pigs are shipped out to other states, so we share a lot of the same concerns as in other states. We raise 18 million pigs in Minnesota off of 3,400 different hog operations, so we work closely with Iowa, South Dakota, Nebraska and Kansas, so I don’t think we have any different issues than anybody else in the Upper Midwest. Everybody’s got PRRS, everybody’s got PED, and our packing facilities are pretty much located where our transportation can get our hogs there in a moderate timeframe.

We do have stricter ordinances as far as building facilities, so that is a challenge.

My concern is what are we going to do with all this new pork on the market with our cold storage already full. Boy, if we can’t get our exports moving, I don’t think we’re going to see a rise in prices for quite a while. A lot of this hinges on the passage of the Trans-Pacific Partnership, and I hear 50-50 if it will get passed. As soon as we think something’s going to get done, then it changes and we’re in the backseat again.

NHF: What is your Pork Month message to fellow producers and to consumers?

Estrem: For producers, try to keep a positive attitude. There will be a light at the end of the tunnel. People are going to keep eating pork. Every time we are faced with challenges on the financial side, it brings us stronger into the industry to do a better job of raising our pigs to get the best quality hog out of the least amount of dollars to produce that pig. We on the Minnesota Pork Board are doing the best that we can to be sure that we are using your checkoff dollars to the best of our ability, so have faith in us to keep our industry in a positive manner.

As for consumers, we just want to let them know that pork is a very safe product to eat, high in protein. The way it is raised is very healthy, and it’s the way most people want us to raise our pigs, but it’s also the way we want to raise our pigs.

Farmweld offers A-Crate for today’s farrowing room

Farmweld Inc. is proud to present the A-Crate, an improved farrowing crate that better meets the needs of today’s sows and farrowing room workers.

“We designed the A-Crate with the sow, piglets, farrowing room employees and installers in mind,” says Aaron Niebrugge, sales manager for Farmweld. “With the A-Crate, we maximized the sow area — giving her more room than ever before to increase her comfort — and we enlarged the front-alley space. Meanwhile, installers benefit from the easier two-bolt installation.”

Sow comfort is critical to keeping today’s larger, leaner sows productive. Research shows that a comfortable sow eats better, milks better and stays in the herd longer, which not only benefits the sow, but her piglets and the producer as well. Providing a safe work space with easy access to the sow and litter helps ensure that farrowing room tasks are done in a timely manner. These were among the factors that Farmweld engineers considered when designing the company’s new A-Crate.

“The safety of farrowing room workers is enhanced by the A-Crate’s new rounded crate edges,” Niebrugge says. “The low-back side panels also make it easier for workers to access the sow and baby pigs.”

Here’s a look at some additional features that the Farmweld A-Crate has to offer.

♦ Allows for multiple sow feeder options to best fit the needs of each producer

♦ Pig Saver Flip Bars ensure the sow eases herself down slowly to protect baby pigs, yet the bars won't restrict the sow as it stands back up.

♦ Swinging Rump Guard gates open forward and backward giving workers excellent access to assist during farrowing, and makes it easy to clean up behind the sow.

♦ Solid-rod construction provides superior durability

For additional information about the A-Crate or any of the many other Farmweld products, visit Farmweld.com or call 800-328-7675.