Developing Sustainable Hog Markets and Slaughtering Arrangements for Family Farmers in Missouri

1996 Annual Report for LNC96-105

Project Type: Research and Education
Funds awarded in 1996: $83,762.00
Projected End Date: 12/31/1999
Region: North Central
State: Missouri
Project Coordinator:
Douglas Constance
Sam Houston State University

Developing Sustainable Hog Markets and Slaughtering Arrangements for Family Farmers in Missouri

Summary

The two objectives of this project were to develop sustainable hog slaughtering arrangements and markets for family farmers in Missouri. To meet these objectives, the research team identified, visited with, and consulted with producers and processors in Missouri, Iowa, Minnesota, Indiana, Illinois, Kentucky, Texas and Michigan regarding the two objectives. More specifically, factors that contributed to the successful emergence of groups of hog farmers working cooperatively, adding value to their product and sourcing slaughter markets were identified and analyzed.

The results of these investigations reveal that pork producers across much of the country are faced with issues similar to those for Missouri producers. We found several examples of farmers grouping together in networks to source inputs, gather information and sell their products. Some of these networks were "new generation" co-ops, some were limited liability corporations and others were more traditional co-ops. We also found common examples of large independent farmers restructuring their operations to concentrate on farrowing and then contracting with their neighbors for finishing.

We found a limited number of examples of independent farmers coordinating a farrowing to marketing system that specialized in a particular product, such as Berkshire Gold, targeted for a specialty market. A common strategy to gain and maintain better access to slaughter markets was pooling several different producers' hogs in a single potload and providing such potloads on a regular basis. Some members of the Osage Independent Pork Producers are now participating in this kind of arrangement.

Research conducted on the feasibility of targeting niche markets, such as the Hispanic and/or range/chemical-free/organic markets, indicated that although the Hispanic market is growing, their diet in the Midwest area is rapidly becoming similar to Anglo diets, which decreases the "niche" character of the market. Regarding the range/chemical-free/organic strategy, relevant data in the U.S. that illustrated the feasibility of production systems that do not rely on the regular use of antibiotics were lacking. Although this strategy is very interesting, lack of scientific support was a major hurdle keeping the group from proceeding on this course.

Further research revealed that data from Europe indicated that with appropriate management methods and small-scale processing this approach is feasible. The research team found examples from Europe that incorporated a cooperative organizational form with strict animal welfare components in production combined with small batch processing. The arrangement creates a pork production system with close ties between the producers and the processors and has prompted some members of the Osage group to pursue a "closed, member-owned co-op," similar to the new generation co-ops in the Northern Plains.

Another major result of the research was the resolution of the situation regarding decreasing access to slaughter facilities. The team found a rapid demise of small slaughter facilities with USDA certification, combined with a trend toward processors increasingly relying on long-term contracts with large operators for predictable supplies of quality hogs. Some packers told us that there would be some plants in the near future that only accepted contracted hogs. Packers also reported that they would kill the group's hogs but could not guarantee to give them back the same hogs for possible value-added further-processing.

In response to this disturbing information, the Osage group has made successful contact with a local small packer that has agreed to do the killing and then return the product to the Osage group for distribution. As a result of information gathered by the research team, the group is now developing its own branded label and has obtained a grant from the State of Missouri to investigate the feasibility of buying or building an existing small processing plant.

For more information:
Douglas Constance
Sam Houston State University
Department of Sociology
P.O. Box 2446
Huntsville, TX 77341-2446
409-294-1514
409-294-3573 (fax)
soc_dhc@shsu.edu