Other articles in the series: Thin Is In -- Or Is It? | Pork's New Game Plan

Opportunity may only knock once, but threats to U.S. pork may knock down the door if the industry doesn’t answer. For that reason, the American Meat Science Association compiled a report on strengths, weaknesses, opportunities and threats (SWOT) to the U.S. pork industry.

The findings are part of the pork industry’s Benchmarking Value in the Pork Supply Chain study. The prior study — the National Pork Chain Quality Audit, took place in 1993. Researchers at the University of Illinois, Texas A&M University and Colorado State University developed the SWOT analysis that accompanied the study.

Last month, Pork magazine presented the U.S. pork industry’s strengths and weaknesses. Now let’s look at the opportunities and threats that the industry faces.

Opportunities

  • There is diversity in U.S. pork products, which the industry does not capitalize on in terms of developing domestic and export trade.

    One way pork’s diversity can be exploited is with new product offerings in foodservice, promoting more and varied recipes, and in marketing these opportunities to foreign customers, says David Meisinger, assistant vice president of education services, National Pork Board.

    “Pork is more diverse than other meats because of the multitude of fresh, cured, smoked or enhanced products  available on the market,” he says. “No other meat protein has this number of products.”

    Using bacon as a flavor enhancer is “an example of success in adding value and diversity to a pork product,” notes Meisinger.

  • Opportunity exists to refine targets and redirect processing to create products of higher demand to end users. Meisinger sees continued emphasis on areas like exports, retail and foodservice as key to U.S. pork’s future.
  • Remove barriers to more effective communication among different sectors of the pork chain as well as among those within a sector.

    This was the subject of a national study in 2002 by Pork magazine and Philip Morris. It revealed that there’s an increasing communication disconnect as participants move through the chain — from producer to packer to processor to retailer and foodservice. On the other hand, every segment indicated that it was interested in more communication with all participants of the chain.

    “Communication pieces like the Food Systems Insider certainly help address this need,” says Meisinger. “Also, programs like Pork 101 bring all segments together to share business philosophies and concerns.”

    “My impression is that communication flow throughout the chain is better than it’s been in the past,” says Steven Lonergan, Iowa State University meat scientist. “It’s difficult for communication to flow from sector to sector for commodity products, but it’s critical for that information sharing in more targeted markets.”

  • U.S. pork industry must consider opportunities for international cooperation in marketing pork. This might include promoting “North American” pork, produced in the United States and Canada in certain markets.

    Meisinger points out that the United States, Canada and Mexico still have a definite competitive spirit, so he is not sure that a North American product will likely occur in the near future, but he finds the concept intriguing.

  • Improve communication and consumer education about U.S. pork and pork production’s positive attributes.

    “Checkoff-funded research provides a wealth of information,” says Lonergan. “There may be some opportunity for University Extension programs to assist in  more programs like Trucker Quality Assurance.”

  • Research studies and technology transfer offer substantial opportunities to improve pork quality. Meisinger points out, production research helps reduce costs, making U.S. pork more competitive. Environmental research allows pork production to continue. Swine health research makes the United States a more reliable supplier. Pork safety research provides assurances to customers, and pork quality research helps ensure a positive eating experience. Animal well-being and handling research allows the United States to have science-based responses. Finally, product development research brings on new products and packaging technologies.

    “In addition, there’s a lot of research that shows how pork is part of a healthful diet,” says Lonergan.

    These opportunities exist for the entire U.S. pork industry. “Entrepreneurs and the free-market incentives characterize the U.S. pork industry,” says Meisinger. “They provide examples of where and how you can capitalize on opportunities. Niche marketing is catching on as a value-added opportunity for pork producers.”

    Now, let’s look at the challenges U.S. pork faces.

Threats

  • Failure to comprehend, and adjust to, animal well­being issues. “Animal well-being should never be looked upon as a threat,” says Meisinger. “However, some of the activist approaches are a threat.”

    The point is not to close your mind too quickly to production practices that may need to change. He agrees the danger is when changes are required without science to back them up.

  • Inadequacies in assuring pork’s food safety status. Continued efforts to reduce and eradicate food-safety concerns like trichinosis and Salmonella are essential. Also, the industry must make sure that any decisions regarding antibiotic use is based on science. If there is any legitimate danger or antibiotic residue, then changes must be made.
  • Failure to remain competitive globally, with other countries’ pork and other animal proteins. U.S. pork exports did show annual gains for the 12th consecutive year in 2003. Still, long term this competition will only intensify.
  • Lack of stability of U.S. and world economies. A country’s currency exchange rate and its inflation level can significantly hurt or help its opportunities in world markets.
  • Variable-cost fluctuations, especially for labor and capital. “As the entire pork chain moves toward alliances, every segment will share in the supply and demand changes, which will temper price fluctuations in any one segment,” says Meisinger. “Likewise, pork producers can help soften some of these fluctuations by locking in some of their costs.”
  • Failure to address environmental issues. Similar to animal well-being, the industry should not consider environmental practices a threat, but rather make sure that they are based on sound science.
  • Loss of market share to other animal-protein sources. A significant foreign-animal-disease outbreak or one with human-health implications would be pork’s biggest concern in terms of losing market share to other animal proteins. If pork where tied to a human-health issue it could erode confidence in the U.S. supply.
  • Loss of the U.S. pork checkoff program. “There are literally hundreds of producer-directed programs funded by checkoff,” says Meisinger. Some of these programs provide the science to establish standards for the industry — such as in animal well­-being, environment, quality assurance and pork safety. Losing these programs, and the science they provide, would make the industry’s opponents’ jobs easier.

    Lonergan adds that checkoff-funded research tends to have immediate application to on-farm production.

  • Competition from non-meat protein sources. Lonergan says societal factors like people living a vegan lifestyle could present some long-term threat to the industry.
  • Failure to implement known strategies to improve pork quality. “The greater issue may be failure to find out more about things we don’t know,” says Meisinger. “For example, there’s a new theory that suggests our genetic selection of lean, heavy-muscled pigs has shifted pale, soft and exudative pork away from the stress gene. So, we may still have stress-prone pigs without them testing positive for the stress gene.”
  • Inability to measure changes in industry sectors and in product quality. “Product quality starts with genetics. All other segments of production and processing can only protect the quality or cause deterioration,” says Meisinger. “There’s not much any segment can do to improve fresh pork’s quality, with the exception of product enhancement” (pumping, marinating), and that has limitations.

    So, those are the opportunities and threats that the U.S. pork industry needs to address in the coming years. How you might be able to capitalize on the opportunities, and defend your business from the threats will determine what route you take your pork operation in the future

Editor’s Note: This is the second in a series of three articles discussing the pork industry’s business plan as based on the Benchmarking Value in the Pork Supply Chain study.