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January 2008 Issue
Back to the future
by Darrell Anderson
I took a call this week from one of my favorite characters in the swine industry – Roland “Pig” Paul of Meza, Ariz. If you know of his accomplishments and track record, he needs no introduction. And if you’ve never heard of him, there’s not enough room on this page to adequately outline the talents and perspective that he brings to our industry.
During the course of our conversation, we drifted to the topic of a trip he took years ago to Ireland.
While there, he observed the in-fighting between Northern and Southern Ireland first hand and was quite confused what it was all about.
So, he asked a local in a candid manner, “Why are you guys still fighting among yourselves in this country?”
The answer he received has echoed in my ears since I heard it earlier this week.
The Irish gentleman responded to Pig’s question, “We’re standing with our backs to the future, looking at the past.”
As we enter into 2008 – an uncertain time in our industry – I hope we aren’t as guilty as the Irish countrymen who are “standing with their backs to the future, looking at the past.”
There could be a tendency to get caught up in that mentality quite easily. Everyone is concerned about the profit woes brought on by $4 corn and high-priced soybean meal – that is, everyone who doesn’t have 1,000 acres of each to harvest. If recent hog slaughter is any indication, record numbers could be harvested in 2008. That causes many potential problems, in addition to bringing up bad memories for many of us.
But, 2008 is not 1998, and many things have changed in the past 10 years. I don’t have exact figures, but I know cattle prices were not as high in 1998 as they will be in 2008. In fact, they were about 70 percent of what they will be this year. Since they are one of our main competitors, it helps that they won’t be undercutting our price in the meat case. And, for cost-conscious consumers, pork will be the meat of choice.
Exports of pork and pork by-products are at record levels and continue to increase each year. They are substantially higher today than they were in 1998, and they have played a large role in helping sustain a decent price for our product.
The elasticity of our market today is so tight that a small decrease in consumption can cause a large fluctuation in the market price. So, increases in exports each year have been crucial to our profitability during the past few years.
The good news for those of you involved in the day-to-day production of breeding stock of our four breeds: our genetic performance has improved substantially in the past 10 years. We have a far superior product that meets the needs of our commercial and showpig clientele.
As an example, look at our figures gathered through the STAGES program. The average days to 250 lbs. for the entire Duroc breed has decreased from 176 days in 1998 to 166 days last year. That’s pretty significant in light of $4 corn.
Or, how about the maternal improvement made by the Landrace breed? In 1998, the average number born alive was 10.4 pigs. Today, it is 11.4. That’s one extra pig per litter to cover your maintenance cost of keeping that sow around all year. In addition, their 21-day litter weight has increased from 139 lbs. to 156 lbs. during that same time frame. That is a phenomenal improvement in traits that are relatively lowly heritable.
So, as you can see, we are dealing with a much different scenario in 2008 than we were during the fiasco of 1998.
But I’ve saved the best news for last. In 1998, we had about 200 kids in the National Junior Swine Association (NJSA). Today, we have slightly more than 10,500 NJSA members representing every state in the United States. Now, that is the best news I can deliver for those of you targeting the showpig segment of our industry. There is little question that the growth of the NJSA has played a significant role in profitability for many of our members. It’s a win-win situation for everyone involved.
So, as we embark on the path of this year, let’s not turn our backs to the future while watching the past.
Let’s dream a little about the things we can accomplish this year. And remember, when we dream alone, it is only a dream. But when we dream together, it is the beginning of a new reality.
Let’s all dream together and set our goals high for 2008!
