Iowa Public Television

 

Pork producers find profit in small scale vertical integration

posted on March 3, 2000


CRITICS OF LARGE-SCALE HOG OPERATIONS CONTEND THE FACTORY FARMS ARE A HEALTH AND FISCAL MENACE TO RURAL COMMUNITIES. THEY ARGUE THE SO-CALLED "INTEGRATORS" ARE NOT MORE EFFICIENT PRODUCERS, CONTENDING THEY EXIST ONLY BECAUSE THEY ENJOY DEEP POCKETS AND A HISTORY OF BENIGN GOVERNMENT REGULATION. THE CRITICS ALSO CHARGE THAT AN INCESTUOUS RELATIONSHIP OF A HANDFUL OF PACKERS AND LARGE PRODUCERS IS PUSHING SMALLER, MORE COMMUNITY FRIENDLY FARMS OUT OF THE MARKET.

FOR THAT REASON, SOME SMALLER PRODUCERS ARE FORMING MARKETING VENTURES OF THEIR OWN.

A CASE IN POINT, AS PRODUCER JOHN NICHOLS HAS FOUND, IS A GROUP OF MISSOURI PORK PRODUCERS WHO ARE TAKING THEIR PRODUCT TO TOWN, DIRECTLY TO CONSUMERS.

ROGER ALLISON RUNS A 15 SOW FARROW TO FINISH OPERATION NEAR ARMSTRONG, MISSOURI. HE'S ALSO THE EXECUTIVE DIRECTOR OF THE MISSOURI RURAL CRISIS CENTER IN COLUMBIA.

FOR TWO DECADES, THE NON-PROFIT ORGANIZATION HAS BEEN AN ADVOCATE FOR THOUSANDS OF MISSOURI FARMERS.

FOR MOST OF THE '90'S, ALLISON FOUGHT THE CORPORATE TAKEOVER OF THE AMERICAN PORK INDUSTRY.

IN 1997, ALLISON AND A HANDFUL OF OTHER PRODUCERS FOUNDED PATCHWORK FAMILY FARMS... A VALUE-ADDED CO-OP WHICH RAISES HOGS SUSTAINABLY AND RETURNS MUCH OF THE PROFIT TO THE FARMERS.

Roger Allison: "Two years ago we grossed $60,000 in sales. Last year we doubled the amount of sales to $120,000 and this year we're projected to do over $200,000 of sales and we're on track for that."

DESPITE RAPID GROWTH IN SALES, THOSE ASSOCIATED WITH THE PROJECT AREN'T EXACTLY JUBILANT OVER THEIR CIRCUMSTANCES.

RHONDA PERRY ALSO RAISES HOGS NEAR ARMSTRONG, MISSOURI; AND SHE SERVES AS THE PROGRAM DIRECTOR OF THE MISSOURI RURAL CRISIS CENTER.

Rhonda Perry: "The environment in which this project took place and others will take place you know is a very negative environment for farmers and rural communities. And its not good that we have to have these types of projects in order to survive, but it is good that we have figured out how to do it, and we've been creative and we've been able to provide a quality product to consumers."

THE TWELVE PRODUCERS WHO RAISE HOGS FOR PATCHWORK RECEIVE A SUBSTANTIAL PREMIUM FOR ADHERING TO STANDARDS ENSURING NEITHER THE ANIMALS NOR THE ENVIRONMENT IS EXPLOITED.

IN CONTRAST WITH MOST CONFINEMENT OPERATIONS, PATCHWORK HOGS ARE RAISED OUTDOORS WITHOUT GROWTH HORMONES OR ANTIBIOTICS.

AND AT THE MEGAMARKET IN COLUMBIA, CUSTOMERS SAY YOU CAN TASTE THE DIFFERENCE.

Margot McMillen: "It's just a much better product, it really tastes good, I don't worry about hormones, and antibiotics and stuff in it when I eat it so that means a lot to me."

PATCHWORK DISPLAYS ITS PRODUCTS IN A SEPARATE COOLER AT THE MEGAMARKET, WHERE IT SELLS ABOUT 2,000 DOLLARS WORTH OF PORK EACH MONTH.

Chris Huskey: "This is the only individual group that comes in and promotes their product meat wise and the way its going its just been terrific. And what makes this product good is that they're getting in there and competing with the big guys and they're giving them a run for their money."

ANOTHER RETAIL OUTLET IN COLUMBIA IS MURRY'S RESTAURANT, WHERE THE MENU FEATURES PATCHWORK PORK CHOPS.

Consiglio: "They're fantastic, some of the fattest pork chops I've ever seen,16 ounce they're fresh and delicious. We also supply our ham sandwiches with their fresh whole hams; it's an excellent product as well. We sell approximately 10-12 pork chops a night, and I would say about 35 pounds of sliced ham a week."

PATCHWORK PAYS ITS PRODUCERS A MINIMUM OF 43 CENTS PER POUND. WHEN PRICES ARE HIGHER THAN 43, THE FARMERS RECEIVE THE MARKET PLUS A 15 PERCENT PREMIUM.

THE CO-OP HAS PAID AS MUCH AS 70.00 PER HUNDRED WEIGHT; AND EVEN WHEN PRICES PLUMMETED TO RECORD LOWS, PATCHWORK CONTINUED TO PAY ITS PRODUCERS 43 CENTS.

John Storm: "They are paying forty three cents and haven't had any trouble and we have sold as low as ten or eleven dollars at the local sales and forty three is a lot better than eleven."

THE DOWNTURN STORM REFERS TO TOOK PLACE IN DECEMBER OF '98 WHEN PRICES FELL TO A RECORD 7 CENTS PER POUND.

MEANWHILE, I-B-P, THE NATION'S LARGEST PACKER, REPORTED RECORD 4TH QUARTER PROFITS OF MORE THAN 91 - MILLION DOLLARS.

PERRY FROM PRESS CONFERENCE: "We're here today to say this gravy train to the NPPC is coming to a halt."

BOTH PERRY AND ALLISON ARE HARSH CRITICS OF THE MANDATORY PORK CHECK-OFF... A PROGRAM THAT CHARGES PRODUCERS ABOUT 45-CENTS FOR EVERY HUNDRED DOLLARS THEY RECEIVE.

THE CHECKOFF IS ADMINISTERED BY THE NATIONAL PORK BOARD, AND MOST OF THE MONEY IS EARMARKED FOR PROMOTION AND RESEARCH CONDUCTED BY THE NATIONAL PORK PRODUCERS COUNCIL, OR NPPC.

ACCORDING TO THE CAMPAIGN FOR FAMILY FARMS, THE NATIONAL PORK BOARD HAS RECEIVED MORE THAN HALF-A-BILLION DOLLARS SINCE THE PROGRAM WAS ESTABLISHED IN 1986.

BUT ALLISON CLAIMS THE PRODUCER'S SHARE OF THE RETAIL DOLLAR HAS FALLEN FROM 46% IN 1986 TO 20% TODAY.

IN APRIL OF '99, THE MISSOURI RURAL CRISIS CENTER, ALONG WITH SEVERAL OTHER GRASS-ROOTS ORGANIZATIONS SUBMITTED PETITIONS CALLING FOR A VOTE TO END THE MANDATORY PROGRAM.

Allison: "We got over 19,600 independent hog producers signature on the petition asking that we be able to vote on whether we want to continue the check-off... whether the Pork Board continues to get money from us. And that's almost 20% of the hog producers in the United States."

JUST THIS WEEK, SECRETARY OF AGRICULTURE DAN GLICKMAN DIRECTED HIS DEPARTMENT TO CONDUCT THE REFERENDUM AS SOON AS POSSIBLE AND TO PAY FOR IT USING U-S-D-A FUNDS.

THE VOTE IS PENDING. BUT IN THE MEANTIME, PATCHWORK FAMILY FARMS CONTINUES ITS DIRECT- MARKETING EFFORTS, AND ST. MARK'S CHURCH IN KANSAS CITY IS A SPECIAL RETAIL OUTLET FOR THE CO-OP.

SEVERAL TIMES A YEAR, THE FARMERS PUT ON A BARBECUE AT THE INNER-CITY CHURCH. THE CUSTOMERS RECEIVE FREE SAMPLES AND PURCHASE THEIR PORK RIGHT OUT OF PATCHWORK'S TRUCK.

THE SYMBIOTIC RELATIONSHIP APPEARS TO BE APPRECIATED BY EVERYONE.

Gene Bohannon: "Generally you don't hear the word "free" connected with anything and Patchwork Family Farms gave us all you know the samples of the meat, which its more than samples its really a full meal, but I was really impressed with the flavor of the meat. I mean its just the best. Delicious!

DESPITE SATISFIED CUSTOMERS AND BOOMING SALES, PATCHWORK ISN'T LIKELY TO BECOME A LARGE-SCALE PRODUCER.

INSTEAD, THE COOP SEES ITSELF AS A MODEL THAT CAN BE REPLICATED BY OTHER PRODUCERS.

Perry: "We're probably gonna stay at 12 producers but our goal is to increase the amount of production we take from each producer you know to 75% of everyone's production over the course of the next two years. We think that's a viable option and its putting money into those producers' pockets."

IN A TIME OF GREAT UNCERTAINTY FOR FARMERS, THE CO-OP OFFERS A GLIMMER OF HOPE THAT PORK PRODUCTION CAN BE PROFITABLE.

AND WHILE THE BATTLE FOR CONTROL OF THE INDUSTRY DRAGS ON, IT'S LIKELY PATCHWORK FAMILY FARMS WILL CONTINUE SELLING THE OTHER, OTHER WHITE MEAT.

FOR MARKET TO MARKET, I'M JOHN NICHOLS.

Tags: agriculture animals farms livestock meat news pigs pork rural