Finding ways to move deeper into the pork value-chain is the challenge everyone is trying to solve.
The last three years have seen structural changes throughout the pork industry, causing everyone to look for new opportunities to capture more value from the final product.
Several universities and state departments of agriculture have formed teams to study value-added opportunities. This article will look at several of those groups, allowing you to decide which programs, if any, might offer guidance for you.
Missouri Value-Added Development Center
The University of Missouri center, headed by agricultural economist Joe Parcell, encompasses all areas of agriculture, from ethanol plants to pork processing.
"The way we define value-added is helping the producer capture a greater portion of the end-user dollar," says Parcell. That can be accomplished by owning physical assets somewhere in the chain, doing something on the farm to add value, or improving the quality of the end product."
Parcell points out that value can be captured or created by the producer. Examples of capturing value include a pork processing plant. Creating value would fall to projects like creating a name brand.
The center has been in operation since last September and has four full-time employees. What makes the program unique is the fact that 30 regional agricultural business counselors allocate 20 percent of their time to the project. These counselors come from University Outreach and Extension, the Missouri Department of Agriculture and Small Business Development Centers. Future counselors also may come from commodity groups or private industry.
"We're trying to train the staff to ask the right questions when producers come to us," says Parcell. "We can help with business plans and provide information about where to go for funding and feasibility studies."
Tennessee Value-Added Pork Team
The University of Tennessee's value-added team has been active for about a year under the direction of swine specialist Glenn Conatser.
The team has spent most of its time working with producers in central Tennessee that have formed a cooperative to sell pork to the Hispanic market. The co-op has plans to open producer-owned, fresh meat stores and to sell pork on the Internet.
"The plan is to take on other projects, but we're still trying to develop a model for other groups," says Conatser. "We need to walk before we run."
He says that all pork producers in Tennessee could be relegated to value-added niche marketing before long. The lack of a packer in the state means that at any point producers could lose the market for their hogs.
The six-person team is flexible and will work with groups interested in forming new generation co-ops, standard co-ops, limited liability corporations, as well as individual producers.
"Most of the producers remaining in pork production today are pretty good hog people, they just need a little help coming up with new ways to market the pork they produce," says Conatser.
To contact the Tennessee value-added team call Conatser at (423) 974-7253 or e-mail email@example.com.
Iowa Agricultural Opportunities
Iowa State University Extension runs a value-added team that provides guidance, directing producers where they need to go.
Before consulting with the group, Mary Holz-Clause, head of the program, suggests that you visit its Web site at www.iowaagop portunity.org. To assist interested parties, the group will conduct a formal or informal organizational meeting to discuss strategic planning.
Once a producer group has defined its objectives for a value-added venture, the Iowa State group will assist in feasibility studies, covering the links needed to develop a niche market. The Iowa State group encourages producers to do their own business plans, so they know what assumptions and considerations are in the plan.
The program also can help arrange legal and financial help, and do audits and loan guarantee studies. These services are not free, and will be quoted on a project basis.
The seven-person team has grown in its four years of operation, says Holz-Clause. The team covers all areas of agriculture important to Iowa, and is available to all Iowa producers. To contact the Iowa State group you can check out the web site previously noted, or call (515) 294-0588.
University of Kentucky Value-Added Processing and Marketing
The value-added team at the University of Kentucky works with producers on product development and marketing, with an emphasis on local markets, says Benjy Mikel, extension meat scientist and program leader.
The Kentucky team has helped producers capitalize on these markets for nearly four years now, says Mikel. About a dozen producer groups have participated.
Among the accomplishments, the team has helped producer groups market pork directly to local restaurants, which has provided a much higher price for locally produced pork. Another group processes their own pork, and makes a pork jerky product, says Mikel.
"We like for the producer to come in with a concept, and then we help develop it – not only technically, but also from a marketing aspect," says Mikel.
To work with the flexible six-person team, contact Mikel at (859) 257-7550.
Minnesota MinnCert Program
The Minnesota Certified program is a unique joint project between the University of Minnesota and the state department of agriculture. It centers on a third-party product certification program, says Thomas Blaha, with the University of Minnesota College of Veterinary Medicine.
The MinnCert program can certify production procedures for any type of agricultural product, but the first group to use the program has been Minnesota Certified Pork. Five producer members of MNCEP, a new generation cooperative, were certified in accordance with the program's production standards in January.
MinnCert certifies that producers fulfill eight criteria for a high-quality product, including Salmonella monitoring and reduction, the use of no subtherapeutic antibiotics and animal welfare standards.
"MNCEP makes producers part of a standardized production procedure, which can secure their futures, lower their production costs and allow them to ask for a premium," says Blaha.
The MinnCert program is available to any Minnesota producer interested in having his or her production methods certified. For more information, contact Blaha at (612) 625-8290, e-mail firstname.lastname@example.org. You also may contact Jerry Shurson, University of Minnesota swine center director, at (612) 624-2764, e-mail email@example.com.
North Carolina Agribusiness Development Program
The value-added programs in North Carolina wear a lot of different hats for the producer groups they work with. Programs can act like an advertising agency, an engineering firm, or help with the front-line efforts of product marketing, says David Walker, North Carolina Department of Agriculture.
The Goodness Grows in North Carolina program works with meat and poultry producers, as well as retail and foodservice specialists to promote the various products involved. In addition, the program has an art staff to help develop promotional items.
The state department of agriculture also holds "Flavors of Carolina" exhibitions to showcase North Carolina products to retail, foodservice and restaurants.
"For every $1 the programs has spent, it generates $5 for producers," says Walker.
Walker says interested producers need to come to the department with an idea, some kind of a business plan and some capital. From there, the department can help with the substantial planning that goes into a value-added venture.
For more information contact Walker at (919) 733-0999 or e-mail him at firstname.lastname@example.org.
Great Lakes Pork Cooperative
The Great Lakes Pork Cooperative is a multi-state initiative that grew out of a suggestion from the Michigan Pork Alliance to investigate the interest of Michigan, Ohio and Indiana producers in value-added initiatives.
The group formed in 1994, says Sam Hines, executive vice president of the Michigan Pork Producers Association. Initially it included allied industry, government officials and academic partners. Much has changed since that time, most notably the Thorn Apple Valley plant closings in Michigan.
This change moved the cooperative away from just pooling market hogs to increase market bargaining power, and toward evaluating further processing opportunities. The group is currently evaluating whether it can process pork without investing in a slaughter facility, or whether it will need to buy a slaughter plant as well. Some of the producers involved in the pork co-op also are involved in a turkey processing co-op, and can draw on experiences gained in forming that group.
"Most of the opportunities, as well as the pitfalls have been raised and discussed," says Hines. "We're committed to doing this but we want to have a strong chance at success. We all need to be confident this is something we can rally around."
For more information, call Hines at (517) 699-2145 or e-mail him at email@example.com.
Auburn Value-Added Team
Auburn University is introducing a program that will combine sustainable agriculture and market analysis, according to Frank Owsley, program chairman.
On the pork side, one objective is to work with small, independent packers and small, independent producers. The program will attempt to create different pricing strategies and determine which cuts add the most value.
Other options include developing specialty markets for 50-pound, 100-pound and 180-pound hogs, says Owsley. By creating a differentiated product the producers will be able to capture more value. "We've had some small farmers selling hogs for $50 per hundredweight a couple years ago when everyone else was getting $6 per hundredweight," he notes.
The program will begin in Alabama as a pilot program sometime later this year, if all goes as planned, says Owsley.
"We're taking a gamble in developing a program for people who've never had a program developed for them before," he adds. "Right now, we're just a drop in the ocean to where we need to be, but we need to get something started."
Interested parties may contact Owsley at (334) 844-1505 or e-mail him at firstname.lastname@example.org.
National Pork Board Value-Added Technical Assistance Team
The National Pork Board's Value-Added Technical Assistance Team is attempting to compile experiences of different value-added projects. The objective is to allow producers with similar goals in different markets share knowledge, information and experiences.
For example, groups in Tennessee and Minnesota are both looking to fill niches in the Hispanic market. Since they won't be competing in the same territory, they might as well learn from each other.
The team will visit producer groups that request assistance. The first request will gauge the progress the group has made on its own. Upon a second request, the team will return with ideas to help the producers get to where the value-added team can function as a consultant. The evaluations are free to producers, and provide a service that you would otherwise have to obtain from a private consultant.
For a more detailed description of the services the NPB team offers see "Value-Added Ventures Under a Microscope" in the January 2001 issue of Pork magazine. For more information, call Earl Dotson at (515) 223-2600, e-mail email@example.com.
In the event that Pork missed a value-added program or team that provides assistance to pork producers, please submit the information to: Pork magazine, Attn. Tyler Kelley, 10901 W. 84th Terrace, Lenexa, KS 66214; or e-mail firstname.lastname@example.org; or call (800) 255-5113.