Smithfield Foods, the world's largest pork producer is challenging the state of Iowa's ban on packer ownership of livestock operations. Smithfield's lawyers argue the ban violates the constitution by interfering with interstate commerce and imposes a "taking" without just compensation. The state contends it is simply trying to protect the free market from a corporation that is hell-bent on monopolizing the pork industry.
Clearly there are some trends in motion. Smithfield produces 12 million hogs a year. It and other large-scale producers, so-called integrators who own every aspect of production, now dominate the pork industry. Thousands of smaller so-called independent pork producers have left the business.
But there are survivors. The key for many has been to develop their own niche markets. David Miller reports on an Indiana venture that links small scale pork production with urban chefs.
ItÂ's early on a school day in rural Indiana. Kara and Evan Gunthorp are saying good-bye to their mother Lei (Lee) as they head off to meet the school bus. Cassidy, the youngest, of the three Gunthorp children, will spend the day at home.
Once the children are gone the chores will begin. Greg Gunthorp, a fourth generation hog farmer, will take care of the livestock. Though it appears to be a typical farm operation, three years ago, Greg and Lei Gunthorp stopped selling their animals to main stream processors and began direct marketing.
Greg Gunthorp, Gunthorp Farms: "...you could consider it an evolution. I wanted to direct market them all. '98 was really the year that motivated us to direct market them all. When you sell pigs for less than twelve cents a pound you realize that you have to do something different."
Today, in the confinement previously used for commodity hogs, Gunthorp is checking on some of the couples 1000 chickens. Before the morning is over, he will also check in on a flock of ducks and a small herd of pastured Berkshire hogs.
Once the couple made the decision to direct market they found the hardest part of the equation was distribution. They began by attempting to sell a few of their hogs to members of the surrounding community but sales were too limited to be profitable.
Greg Gunthorp, Gunthorp Farms: "We sold a little bit around here locally but we'd starve if we had to survive on what people would buy locally. You know, you can get the people that want to buy any quantity seem to be the cost conscious people that want to beat you down on price, you really didn't get any premium when it was all said and done."
When it became clear this was not the path to follow, the GunthorpÂ's began looking for other sales venues. They gradually expanded their search area until they were making phone calls to chefs in the Chicago area, some 145 miles away. The phone calls went unreturned.
A twist of fate gave them their break. While at a conference on sustainable agriculture, Gunthorp was approached about doing what he had tried to do for several months: sell his hogs to Chicago chefs.
After several phone calls he ended up in Pete Manfredini's kitchen at the Napa Valley Grille. Following some discussion about production philosophy Gunthorp left with Manfredini's order for pork.
Pete Manfredini, Executive Chef, Napa Valley Grille: 02:05:49:29 "I think this is nothing new, this is what people were doing fifty years ago but then we had this big boom on mass produced everything and I think it really, you know, hurt the small farmers. They're product is so much more flavor, so much more interesting than the stuff that we're getting flown in from all over the world. I'd rather work seasonally and work locally and know that I have a better product ..."
Now, every Wednesday, Gunthorp drives to Chicago to make deliveries to five Chicago-area white table cloth dining establishments including Napa Valley.
Manfredini likes the fact that he can get any part of the hog, from nose to tail and ear tip to trotter.
Pete Manfredini, Executive Chef, Napa Valley Grille: "It works out great for Greg because when he butchers a hog he knows that every part of that hog is going to be used and it works out great for me because he brings in all these different products and I'm - not that I'm forcing him to - but I really am forcing him to be more creative in actually utilizing the products while it's still fresh and available."
Working with Gunthorp, Manfredini is able to get the product he wants and continue to be true to his philosophy of knowing the source of his ingredients
Pete Manfredini, Executive Chef, Napa Valley Grille: "... it's probably about twice the price. But with all the new boutique porks that are out, you can look at any of the national magazines, all these different companies are coming out with boutique porks. Actually, I think he's, you know, more in line than the rest of these guys. Some people actually want me to pay seven dollars a pound for a pork loin, that's not the case here. You know, good product, good price."
Each week, depending on the time of year, Gunthorp Farms sells between 3 and 10 hogs, 50 ducks and 300 chickens. It costs between $100 and $125 for them to raise a 300 pound hog that sells for around $2 per pound. Chickens are sold fresh for the same amount per pound. All of the animals spend most of the time outside in the pasture and none are given growth hormones or sub-therapeutic doses of antibiotics.
Two years ago, when their third child Cassidy was born, Lei changed the focus of her job duties from outside chores to child care and accounting.
Lei Gunthorp, Gunthorp Farms: "I would be out actually helping with the pigs and we'd help move them, help sort them, help load them, do whatever we needed to do. Now with Cassidy, the last two years I haven't been able to help near as much but she's getting big enough to where she's going to be able to start going back out again and we'll be able to start working with the animals."
Once the distribution question seemed to be on its way to being solved the GunthorpÂ's encountered the next big hurdle: processing. They had too many animals to do the work themselves but not enough for a special run at an established plant. To solve the problem, Gunthorp became a part owner in a local meat processing plant. When he discovered he was running out of hours in the day he sold his share and went back to the farm full time. Now he spreads his orders across seven packers who have agreed to do the work.
After three years, their patchwork of attempts at direct marketing has become a steady stream of product leaving the farm. What isn't purchased by the small group of chefs is used during the spring and summer season as meat for the Gunthorp's catering business.
The couple's vision of the future includes selling fresh meat from spring until fall and closing down through the winter. This decision will not be made without some consideration of what impact the move might have on their client base. The Gunthorps stand the chance of losing customers who only want a fresh product and, no matter how pleased with the quality, will refuse to use anything frozen. And as the flock grows larger they are thinking about building a processing plant on their premises.
Greg Gunthorp, Gunthorp Farms: "I think the big thing that makes me keep wanting to do it is that we're trying to really change the food supply here. When we raised commodity pigs I really didn't like the idea that we raised the pig without antibiotics, raised it out on pasture and turn around and send it off to the buying station and it went right to the grocery store or export or wherever right along with all the other commodity pork....I think that it's high time that we put a value on a local food supply and that I think the only way that's going to be possible is with low cost pasture production coupled with local processing and marketing."
For Market to Market, IÂ'm David Miller.