C4-Uncaster Farming. Saturday, January 1, 1994
Livestock Director
AMES, lowa—Pork producers
who want to retain their financial
and management independence
into the 21st century must be will
ing to give up a bit of their indivi
duality by networking with other
pork producers through systems
that will provide access to capital,
new technology, and markets.
Richard Ellinghuysen. National
Farmers Organization (NFO)
livestock director, gave that mes
sage to a select group of approxi
mately 27S U.S. pork industry
leaders participating in a recent
symposium on “Networking:
Competitive Positioning for Pork
Producers.” The symposium was
coordinated and hosted by the
National Pork Producers Council
in Des Moines.
“The primary focus of these
anticipated networking systems
must be profit,” Ellinghuysen
said. “National Farmers’ Group-
Marketing+ program, which fea
tures a cash-flow contract, is posi
tioned today to become one of
those systems in the pork industry
network."
Ellinghuyscn suggested that
“knowing where we are today,
where we want to be tomorrow,
and using the tools that are avail
able to us, we can have a secure,
profitable, and independent
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future.”
He noted that large companies
are becoming a part of the pork
production business today and that
they are getting in to make money,
not to become emotionally
attached to the pigs. “By manag
ing change, and not just reacting
to it, and by thinking a bit diffe
rently about pork production,
financing and marketing, we inde
pendent pork producers can com
pete and make money, too,” he
said.
National Farmers’ GroupMark
eting+ program has three main
features, according to Ellinghuy
sen: (1) It is a group marketing
activity that provides market
leverage and market access
through volume; (2) It features a
Pork Improvement Project that
uses extensive kill-sheet evalua
tion and ultrasound evaluation of
gilts and boars to improve pork
quality; and (3) it features a cash
flow contract that allows the pro
ducer to secure the same base
price on a portion of his or her
hogs for each month up to 12
months into the future.
Ellinghuysen described Nation
al Farmers’ Cash Flow Contract as
“similar to a forward contract, but
with one key difference. A for
ward cash contract covers one
'We Take Customer Satisfaction Tersonatty
Describes Cash-Flow Contracts
group of hogs to be market at a
specific time at a preset price. The
Cash Flow Contract deals with
several groups of hogs to be deliv
ered over a period up to 12
months. All hogs covered by the
contract have the same preset
price. Our members using the
Cash Flow Contract like the stea
dier cash flow feature.”
The NFO livestock department
director advised that “before
offering to sell hogs on a cash
flow contract, we insist that our
members evaluate the available
price relative to their production
costs and cash flow needs. If the
margin is acceptable, then they put
a portion of their production, usu
ally no more than 10-percent of
their anticipated annual produc
tion, into a single cash flow con
tract sale. If prices rally after they
sell, they can enter another cash
flow contract to lock in another
higher uniform price for another
increment of their production.”
Ellinghuysen concluded that
according to an lowa State Uni
versity study, 47 percent of lowa
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•••*•
SYCAMORE IND. PARK
255 PLANE TREE DRIVE
LANCASTER, PA 17603
(717) 393-5807
farmers have never used a forward Farmers’ GrcupMarketing+ prog
cash contract, 74 percent have ra ™ V ses toose too^s * P* us toe
never used agricultural commodi- price-influence of group volume,
ty options, and 76 percent have to give independent pork produc
never used the futures market for ers more control of their future. If
hedging. "These are valuable tools we network and strive to manage
that are going unused. National change, we can survive and thrive
in the future.”
Bradford County
Sets Dairy Day
TOWANDA (Bradford Co.)
The Bradford County Dairy Day
will be held on Monday, February
21 firom 9:30 a.m. to 3:30 p.m. at
the Troy Middle School in Troy.
This year’s program will
include presentations on BST:
issues and answers, die pro and
cons of manure storage, particle
size analysis, and large round bale
storage.
Exhibitors and sponsors are
being accepted for Dairy Day. The
deadline to register to exhibit or
sponsor is January 7. Exhibitors
will receive a 3 x 8 foot table at
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Dairy Day. Sponsors will have
their name printed on the brochure
and have their names announced
during Dairy Day.
If any business would like to
exhibit or sponsor Dairy Day and
did not receive an application
form, please call Tom Maloney at
the extension office, (717)
265-2896.
There is no charge for farmers
to attend. A free roast beef dinner
will be served. There also will be
ice cream, milk punch, and other
dairy products available, in addi
tion to door prizes.