The history of the hog industry isn’t quite what you’d expect to hear at a beef conference. Despite this, it’s worth a listen—some similarities are concerningly close.
Marty Ropp, founder and CEO of Allied Genetics Resources, spoke to the morning audiences at the Beef Improvement Federation conference in Loveland, CO, on Friday, June 22. He told of the hog industry of his youth and drew many parallels between it and the cattle industry now. These comparisons became a cautionary tale of the risks of clinging to tradition and ignoring the drivers of industry profit.
“It’s far easier to learn from the past mistakes and tribulations of others than to repeat those mistakes ourselves,” he warned.
A bygone hog industry
In the hog industry of Ropp’s youth in Illinois in the 1970s, there were some 650,000 independent swine farmers. It was a time when “pigs paid for farms” and 100 sows was a big herd. Independent seedstock operations were profitable and hybrid boars were scorned as unsellable.
However, this was also a time when the pork industry was very segmented and genetic improvement was done by phenotype. Breed associations promoted, and seedstock operators bred for, the “look” they thought would produce the pork consumers wanted. But, according to Ropp’s story, they were wrong; pork quality was not satisfying customers.
“In 1984, the packing industry in this country—either by design or by chance—took over the pig genetics business, starting with the use of grids,” Ropp explained. He said the premiums started off small, but quickly grew as processors paid (or discounted) based on the market quality of producers’ hogs.
Such that Ropp told it, most of the independent seedstock producers of the mid-1980s continued on as though they were safe from the changing industry.
“They asked us for a better product, and we would not deliver it because we were going to raise the pigs we wanted.”
The ultimate result was that the market forced the hand of the producers; either to change or to go out of business. Ropp pointed out that there are now about 50,000 hog producers in the country.
“So, what changed?” he asked the audience, rhetorically.
“Some people decided to focus on the pork industry as a large-scale business,” he answered. “They invested in the research and data use versus the old way of making improvement. They used selection technology for profit. And they redefined what ‘better’ was. ‘Better’ was hogs that make more money.”
Beef connection
“It seems a bit like 1984,” said Ropp of the cattle industry today compared to the hog industry of the past.
“We’ve got a largely segmented market, but that’s changing; genetic improvement is too often unfocused, unscientific, and unprofessional; …and we have down-chain participants asking us for more value and some producers are saying, ‘I’m going to raise the kind of cattle I like because I know good cattle. I’m not interested in the profitability of the larger animal business.’”
Though never said directly, Ropp positioned tradition or “the old way” as an obstacle to profitability and longevity of operations in both industries. He said he learned many things from pigs, primarily that a livestock operation must operate as a “serious food business” to survive.
“Whoever it is that’s in charge of genetic improvement in those industries… have to keep the profit of the whole chain in mind; otherwise they’re not doing their job. Without product and profit improvement, you are not a serious business. You’re a tradition-based business and you are not concerned with your customers, but rather with only your own part or your own segment.”
After cautioning his audience that their consumers will replace them if they fail to meet those consumers’ needs—citing the roughly 77 percent decline in the number of swine farmers over a single generation—he stressed another thing he learned from pigs: “In a competitive industry, like the pork industry or the beef industry, science-based decisions and profit will ultimately win out and thrive over opinion and dogma.”
“I promise you: It’s less painful to learn from others than to go through what folks went through in the pig genetics business.” — Kerry Halladay, WLJ editor
“Without product and profit improvement, you are not a serious business. You’re a tradition-based business and you are not concerned with your customers…”
