Producer-Owned Cooperative to Process and Market Sustainably Produced Pork

Project Overview

LNC98-132
Project Type: Research and Education
Funds awarded in 1998: $23,590.00
Projected End Date: 12/31/2001
Matching Non-Federal Funds: $24,190.00
Region: North Central
State: Iowa
Project Coordinator:
Dennis Smith
Iowa Farmers Union

Annual Reports

Commodities

  • Animals: swine

Practices

  • Animal Production: feed/forage, housing, inoculants, manure management
  • Education and Training: decision support system, networking, participatory research
  • Farm Business Management: new enterprise development, cooperatives, marketing management, feasibility study, market study, value added
  • Sustainable Communities: new business opportunities, sustainability measures

    Abstract:

    The project seeks to help farmers establish a cooperative to process and market pork to consumers seeking foods produced under environmentally sound standards. A comprehensive survey instrument was developed and mailed to approximately 1000 Iowa producers, with a return rate of about 24%. The survey measured current production capacity and standards among respondents, as well as gauging their willingness to adopt alternative production methods. Also, the project commissioned a study of individual and group marketing efforts currently engaged in producing and marketing natural pork. The project identified a lack of local processing and distribution capacity as major obstacles to overcome.

    Introduction:

    The overall objective of the project was to explore alternative methods of hog production and pork marketing within a cooperative business structure for producers seeking alternatives to the general commodity markets. The particular niche studied was the market for pork products from hogs raised in an environmentally sustainable manner.

    The project was directed by a steering committee of seven producers who are currently raising hogs, along with an advisor from an allied organization, Practical Farmers of Iowa (PFI). Administration of the project was coordinated by a staff member of the Iowa Farmers Union Education Foundation (IFUEF).

    After a preliminary review of processing, distribution and marketing opportunities, a survey instrument was devised by the coordinator and the PFI advisor. The survey, which measured production and marketing practices currently employed by respondents, was mailed to approximately 800 members of the Iowa Farmers Union and Practical Farmers of Iowa. In addition, a short-term study of Iowa producers currently in the “natural” pork market was commissioned. Finally, more than 2,100 consumers were surveyed at the 2000 Iowa State Fair regarding environmental standards and personal shopping preferences in relation to the project’s objectives.

    Approximately 25% of producers surveyed responded, with just over a quarter of these (55) expressing interest in participating in the project. A significant majority of surveyed consumers supported stricter environmental protections against industrial livestock operations, with even more expressing a willingness to pay premiums for sustainably produced meats. The study of current producers revealed obvious advantages for independent entrepreneurs in exploiting emerging markets in natural pork, but also identified a number of opportunities and challenges for cooperative structures in entering this market.

    Given the responses of both producers and consumers to the principles and objectives of the pork co-op project, the steering committee decided to continue the project into the next phase, which will involve raising funds for the commission of an in-depth study of the market for natural pork products as part of a general business plan for the co-op. Depending upon the results of this more detailed study, the business plan and prospectus will be offered to interested producers in the course of an equity drive to start full business operations.

    The project coordinator and steering committee believe that the overall design of the project, including phases subsequent to these initial steps, will be of significant potential benefit to other producer groups interested in producing and marketing environmentally friendly meat products, whether from hogs or other livestock. Whether or not this cooperative is eventually incorporated, we feel the information developed thus far gives a solid indication of the opportunity available to producers outside of the conventional commodity markets for their animals.

    Project objectives:

    The objectives are to:

    Increase opportunities for small- and moderate-scale owner-operated farms, especially beginning farmers.

    Enhance the economic viability of small- and moderate-scale owner-operated farms.

    Improve profitability of environmentally sound livestock production systems as a means to reward resource stewardship.

    Increase consumers’ access to pork produced with environmental responsibility.

    Help prevent further livestock industry concentration.

    This project will support a group of farmers to establish the organizational structure and lay the groundwork for a cooperative to market pork from small- and moderate-sized producers using environmentally sound production practices. It will enable farmers to meet local, regional and national consumer demand for lean, natural or other specialized pork. The cooperative will tap specialty markets that appeal to consumers’ concerns about the environment, rural communities, and personal health. These markets would provide farmers with premium prices to reward environmental stewardship and create economic opportunities in rural areas.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.