Editor’s Note: This open letter from the National Pork Producers Council in
reference to the disastrous prices for live hogs was sent to us by Herbert Schick,
secretary-treasurer of the Pennsylvania Pork Producers Council with the request
to have it published in Lancaster Fanning. “We appreciate your cooperation in
printing this information in your newspaper so that we can be sure all producers
and consumers will be aware of the situation as it exists at this time,” Schick wrote.
Here is the open letter along with a list of the national board of directors. If you
have questions or comments, you may contact Schick by phone at (215) 285-6519.
National Pork Producers Council
PO Box 10383
Dos Moines lowa 50306 USA
(515) 223 2600
FAX (515)223 2646
Dear Pork Producer.
The current market for live hogs is a disaster. We recognize the crisis resulting from the
current market, and are trying to do everything in our power to remedy the situation
In this letter, we will attempt to answer the three key questions that every pork producer is
asking 1) Why are live hog prices so low when retail prices for pork remain high?; 2) What is
NPPC doing about this economic and 3) What can you as an individual pork producer
do?
prices so low when retail prices for pork remi
1) Wtr
The present critical situation is primarily supply driven. It is not that we are producing too
much pork - domestic consumer demand and exports are actually up significantly compared
to 1997 However, we are producing too many hogs for the existing slaughter capacity in the
industry Simply stated, live hog production has gotten so close to slaughter plarit capacity
and producers have lost bargaming power Federally Inspected slaughter has exceeded more
than 2.0 million hogs per week for seven of the last eight weeks In fact, last week (November
8) was the largest federally inspected hog slaughter In history. Current industry slaughter
capacity is estimated at 385,000 head per day The present slaughter crisis has been further
complicated by the loss of approximately 35.000 head of dally slaughter capacity in the last
18 months as a result of the closure of three packing plants (IBP - Council Bluffs, lA, Dakota
Pork - Huron. SD: and Thom Apple Valley - Detroit, Michigan) along with the permanent loss
of one shift at Smithfleld - Bladen County, NC
While the present price emergency is primarily supply driven, current margins in the pork
chain are troubling The average retail price In September was $2.31/lb. retail weight.
According to USDA’s Economic Research Service, producers received a record low 21% of the
retail (consumer) price of pork in September. The following table reflects the September. 1998
shares for producers, packers, and retailers, and the average split for 1986 - 1998,
BRINGING TECHNOLOGY
NC+ 2395
100 Days
Performance pacesetter in a
wide range of 100-day
environments.
NC+ 3448 New
107 Days
The new pacesetter in the
105-107 maturity zone
NC+4646
111 Days
Defensive yield performer for
higher-stress environments.
Call District Sales Manager Harvey Doyle at
724-459-8580 or see one of these NC+ Dealers.
AARONSBURG
MICHAEL SPEICHER
CANTON
ED PEPPER *717-364-5242
ELLIOTSBURG
WAYNE FREEMAN • 717-582-2397
HALIFAX
BETHTEL FARMS, KENNETH
BECHTEL *717-896-8314
KINTNERSVILLE
WAYNE LITZENBERGER
•610-847-5563
An Open Letter To Pork Producers
From National Pork Producers Council
An Open Letter to Pork Producers from the
Board of Directors of the
National Pork Producers Council (NPPC)
KUNKLETOWN
JEFFREY BORGER • 610-381-3785
LEBANON
CLARENCE MULL • 717-865-2037
LEWISBURQ
AARON MARTIN • 717-524-2952
UTITZ
ELVIN HURSH • 717-733-3538
MANCHESTER
ANIMAL MEDIC *717-266-5611
Down to Earth
Your NC+ Dealer has the genetically superior hybrids and varieties that will yield for you.
Sector
Producer
Packer
It is important to note that while some retailers are not featuring pork, more than 23.000
grocery stores (20 major chains) are aggressively featuring pork and dramatically narrowing
margins as part of the Pork The Other White Sale campaign to enhance the movement of
pork Although it is not reflected in today's farm level prices, retail demand for pork is up 7 1
percent versus last year By comparison no other meat protein (Beef - 0 7%. chicken - i 5%
turkey - 0 6%) has a positive retail change increase this year
What
NPPC is aggressively working on the slaughter capacity issue and encouraging packers and
retailers to significantly narrow margins to more reasonable levels Regarding slaughter
capacity, NPPC is communicating with every packer in the United States asking them to
increase slaughter capacity through Increased chain speeds, overtlme/second shifts
Saturday and/or Sunday kills We need to achieve the ability to slaughter 2 2 million head
per week in the near term The loss of slaughter capacity during the last 18 months is now
haunting us Regarding margins. NPPC is requesting that every pork packer and processor
and retailer participate in a major “Couponing Initiative" on loins and hams We are asking
that packers/processors and retailers cover the redemption cost of the coupon for this effort
This substantial couponing Initiative will effectively reduce current price spreads and offer
consumers a better value
In addition. NPPC has a large number of checkoff funded programs in place that are designed
to increase the domestic and international demand for pork Should you want additional
information on any of these efforts please contact NPPC at 1-800/456-7675 or your website
at www nooc on
Finally, it is Important to note the significant success pork producers are having on demand
in 1998 For Instance
❖ As stated earlier, retail demand is up 7 1 percent in 1998 No other meat protein has had
a positive demand at the retail level this year This has been aided by checkoff funded
efforts like The Other White Meat Sale, and the introduction of many new products
including the McGrilled Pork Sandwich at McDonald's
❖ U.S pork exports are up 32 percent in volume compared to a year earlier despite serious
challenges resulting from the Aslan currency crisis and the devaluation of the Russian
ruble Further. U S pork exports have exceeded the previous year's performance for 15
consecutive months The recent announcement of 50.000 metric tons of pork to Russia
in humanitarian aid is a direct result of requests by pork producers across the nation,
This single deal is equivalent to 8 8 percent of projected total U S pork exports for 1998
❖ Per capita consumption of pork is projected id increase by five pounds per person (CWE)
In 1998
❖ Despite an 11 percent Increase In slaughter, pork stocks in cold storage through
September have actually been reduced
We fully recognize that these successes do not mean much to pork producers when hogs are
under $2O/CWT It is very Important that, in addition to resolving the present slaughter
capacity bottleneck, we enhance demand and sell pork profitably
(Turn to Page A2B)
MANHEIM
ARTHUR AUKER • 717-665-6627
RICHFIELD
SAMUEL KNOUSE • 717-463-2885
SALEM
DONALD EMEL • 609-769-1577
THOMPSONTOWN
ROGER SANER • 717-535-5307
WYALUSING
ANDY CAMPBELL • 717-363-2133
Lancaster Farming, Saturday, November 28, 1998-A2l
September ‘9B Share %
doll
America’s
down to earth
seed company
'Normal” Share 86-98
NC+ 4880
112 Days
Number one yield performer
m the 109-113 day range.
NC+ 5445
114 Days
The proven leader in 114 day
yield and agronomics.
NC+5697
114 Days
Top-end yield potential and
solid early growth .
<s>