You can’t help but empathize with the National Pork Producers Council. Faced with a stampede of retailers and fast-food operators announcing that they’ve set timetables to start sourcing product from producers who don’t use gestation stalls, a statement needed to be made.
With an estimated 80 to 85% of all pork tonnage produced on farms using stalls, rather than some sort of open housing or a pen-type system, if the majority of bigger buyers follow through with their intended sourcing guidelines, the industry will be faced with some serious re-tooling and the significant costs that accompany it.
But the way that NPPC’s opposition was phrased missed the mark. The opening was strong, if a little long-winded:
“It is very disconcerting that retailers, in making decisions about sourcing pork products, continue to succumb to the pressure of activist groups such as the Humane Society of the United States without any consideration of the impact on American farm families, who produce the safe and affordable pork that they sell to consumers.”
So far, so good, including an additional point that the majority of pork is produced at facilities using “the validated practice of gestation stalls.”
But then the argument begins to veer off-track, slipping into a whining complaint about retailers’ lack of consideration regarding supply-chain dynamics.
“Nowhere in the announcements is there any discussion on the willingness of these companies to pay for these requests. These are very complex issues that require interaction of the complete supply chain. Simply making an announcement without understanding the supply chain’s ability to meet the requests or the costs associated with them is simply irresponsible.”
Really? I doubt that there’s a management executive in charge of meat procurement at any retail or foodservice operations of any significant size in North America who isn’t intimately familiar with the costs associated with supply chain requests. From the early years of fighting over beef carcass cover fat trim depth to the endless battles over case-ready packaging to the record-keeping hassles associated with HACCP implementation to the major-league cost-shuffling associated with COOL mandates, the meat industry and its customers have been sparring over who assumes the burdens of any and all cost-shifting for decades.
“Our customers need to understand that these announcements come with severe and unintended consequences,” NPPC’s statement continued.
I believe their customers understand exactly what’s involved.
Supply and demand at work
True enough, if a massive switch to open housing were mandated tomorrow, significant costs would be involved. Certainly, many smaller-scale producers might decide to exit the business, rather than take on the level of debt necessary to comply.
But the companies marketing pork products at grocery stores and restaurants are the ones doing the buying, and procurement proceeds according to free enterprise at its most basic: Customers can demand whatever they want, and whoever steps up to meet their needs can charge whatever it costs.
If the deal works out for both parties, it’s good business. If it doesn’t, then something’s has to change—either the supplier needs to be more competitive, or the customer needs to pay more.
More importantly, that same mindset has been internalized by consumers. They—we—believe we can and should be able to buy anything we want, and we understand there’s a price tag for special features or benefits.
That’s the way the marketplace functions, and the average person—whether they care about animal issues or not—believes the system is relatively fair and functional.
So why is NPPC essentially floating an economic unfairness argument? It doesn’t make sense. Yes, the group noted, “Forced changes on our producers’ choice of sow housing may very well put hog farmers out of business and will certainly increase the price of pork for consumers.”
But unfortunately, those consequences don’t hit consumers until after the fact, and what typically happens then is that they simply adjust their purchasing patterns, and the marketplace moves on according to the dynamics of supply and demand, as always.
Gestation stalls are indeed economically validated, as NPPC noted. Their usage promotes higher yields and greater efficiency (although not significantly different), and that translates to added value throughout production.
Nobody in the industry disputes that, the proof being that nearly all housing built in the last 20 years was designed to accommodate such stalls.
But the marginal improvement gestation stalls provide—and the pennies-per-pound savings they produce—doesn’t trickle down to shoppers at the supermarket meat case or customers waiting at the fastfood counter. They don’t care.
So if NPPC is trying to generate some media coverage that might sway public opinion, they can scrap the “this-is-gonna-cost-you” argument. People simply presume (correctly) that if changes that they consider positive are mandated, whether by regulation or market pressure, they’ll either fork over a few bucks more for their favorite foods or switch to some other product.
And if they’re thinking that commercial buyers might be “softened up” with a hard-hitting message about the economic impact of requiring investments in pork production facilities, they haven’t spent enough time interacting with them.
In the end, any traction to be gained by collaboration among producers and commercial customers will take place if and when it’s mutually advantageous.
Not before and not unless.
That’s why NPPC’s statement is curious at best. The “hidden costs” argument won’t move the needle for consumers, and for the bigger buyers it’s a given that doesn’t need to be rationalized.
The question thus becomes, what’s the point?
The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.