Better Pork -June 2003
BEHIND THE LINES
by ROBERT IRWINMore than a decade ago when the big pig companies started coming into Ontario, many predicted the end for the struggling independent breeder. The fierce independence which had made Ontario swine breeders world leaders was becoming a liability in an industry which needed large gene pools. This month's cover story shows however that the independents are still competing despite the increasing presence of large multinational breeding companies. This story starts on page 6 Independent producers seem to be thriving at the commercial level too. A survey conducted by Ontario Pork shows that as much as 70 per cent of production is coming from traditional farrow to finish barns. While it appears to be three site production barns that are going up around the countryside it is clear that the traditional pork production methods have maintained an upper hand.
One edge for independent producers could lie in liquid feeding. It's had its proponents in Ontario for many years but the technology really hasn't caught on in spite of its major benefit; reduced costs. And feed, after all, is the largest single cost involved in the hog business. The University of Guelph, emulating scientists in Europe, is launching the first liquid hog feeding research centre in North America. One scientist involved in the project says producers could save $10 per hog, a substantial amount to put in the bank. Look for this story on page 20.
Aside from pork prices of course, the environment is foremost in the minds of many producers. For that reason this issue has several articles pertaining to these concerns. Pork production, it seems, is constantly under criticism. Our writers have given us plenty to think about in terms of how individual farmers deal with their neighbours and also a tremendous amount of information on how animal agriculture as a whole can respond to its critics. Both approaches are important as livestock farming continues to grow in Ontario. BP
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What is the future for independent breeders in the genetic numbers game?
While some are convinced that the independents can hold their own against the big companies. Others are suspicious that players like Maple Leaf Pork would like to take over breeding, too, and require everyone to use their hogs. Niche marketing may be the answerby DON STONEMAN
There have never been more Ontario sows than now producing pigs for the growing pork industry. But there are fewer breeders than before producing breeding stock for these operations. While international companies have made some inroads into Ontario, private breeders based here still play a strong part in this growing industry. But will they continue to do soSome farmers are suspicious of the role of Maple Leaf Pork, Ontario's largest processor, which is involved in just about every aspect of pork production. Through its Elite Swine division, mostly on the Prairies, Maple Leaf raises pork through alliances with farmers, helping producers with financing to build barns and providing management.
But some farmers, like Doug McLeod of Embro, think that Maple Leaf would like to take over breeding, too. McLeod, a director of the 3P pork processing cooperative and a past president of Ontario Swine Breeders Association says Maple Leaf wants everyone to use just their hogs.
Elite's breeding arm, GAP Genetics, was established in 1998. GAP Genetics is a multiplier for Elite customers. A second 1,500-sow nucleus herd was established last year. The herds are based on a two-breed maternal nucleus with large white and Landrace, says Manitoba-based general manager Brent Belluck.
"We test a high number of boars," Belluck says. Genetic evaluation is conducted "in-house" and GAP Genetics is not a member of the national swine testing program conducted by the Ottawa-based Canadian Centre for Swine Improvement (CCSI).
Are there plans to expand in Ontario? "Our business development people travel to Ontario on a regular basis," Belluck says.
Recently, Michael McCain, Maple Leaf's chief executive officer, announced that a trace-back system that will allow individual animals and cuts of meat to be traced back to their farms of origin could be in place within two years. This is supposed to enhance food safety.
Is McCain trying to take over all aspects of pork production, including supplying genetics? You wouldn't know it from the growing list of Ontario genetic suppliers approved for Maple Leaf's Signature Pork program, which pays a premium on top of the grid price to producers who follow its program of genetics and feeding.
As of early April this list consisted of: Thames Bend Farms, Tavistock; Maple Leaf Foods own GAP Genetics, Winnipeg; Shade Oak Swine and Total Swine Genetics, Tillsonburg; DB Genetics, Blenheim; Swine Genetics Ontario, Strathroy; NPD Ontario (Genex), Stratford; Acre-T Farms, Brussels; Bodmin Ltd, Pig Improvement Corp, Airdrie AB; Brandy Point Farms of Mitchell, and Shamrock Genetics of London and Varna.
Larry Skinner, chairman of Ontario Pork, is impressed by the number of relatively small Ontario breeders which have got on to the Signature Pork list. Just about everybody is on there, agrees Don Collis, general manager of Quality Meat Packers in Toronto, Ontario's second largest packer.
But not everyone agrees that the Maple Leaf list is meaningful and some think that the days are numbered for small independent breeders. Greg Howard, general manager of Premium Pork, based in Lucan, says it's not where genetic suppliers are now that counts, but where they will be in the future. Howard predicts that big companies will have more marketing clout in the future because they can afford to develop the DNA science needed to keep them on top.
Competitive bunch
Mount Brydges breeder John Gough begs to differ. In 1996, fearing that the big pig companies were going to "lock up" genetics, he helped found Swine Genetics Ontario (SGO) with four other partners. By 1999, he was on his own again, convinced that independents could hold their own against the big companies. In the last four years, he says his gilt sales have tripled. He feels just as strongly about that today, with a proviso: that independent breeders must work together and share genetics from across Canada and around the world.Gough says his epiphany came at the end of 1998. "Prices were down," he says, but SGO was still able to get new and useful purebred genetics from France and the United States.
Those genetics "gave us a boost. It was available with registration numbers," he says. "It seems there is still a core of breeders out there who understand the importance of sharing genetics. How we made progress in the past was to have a free flow of genetics between herds."
This spring, Gough was elected chairman of the 30-member Ontario Swine Improvement (OSI), based at Innerkip. "The independent breeders here in Ontario are a competitive lot," Gough says. "The breeding program at OSI, with government support, has allowed us to remain competitive."
The size of the gene pool is critical to any breeding program, agrees Arnold Ypma, owner of Shade Oak Farms, one of the province's largest boar studs and a member of the Alliance of Independent Breeders. If the genetic base isn't large enough to make progress, a breeder won't be in business long-term, he says.
Ypma's boar stud competitor SGO agrees. Through privately-owned National Swine Genetics (NSG), SGO services Premium Pork's entire sow base and supplies genetics to many small independent operators as well. We can't forget the small independent breeders, says marketing manager James Osborne. The independents "are where SGO came from," he points out.
And independent they are -- or, perhaps, as independent as producers can be in an industry where alliances and joint ventures are constantly changing. In its role as the province's swine herd improvement organization, OSI probes SGO's pigs and puts their information on the national program. Yet OSI also sells boar semen in competition with SGO and other independent breeders.
It's an interesting situation, says SGO's Osborne. OSI's financial statement for 2002 indicates that more than two-thirds of its income is from an Ontario Ministry of Agriculture and Food grant. Income from service fees fell 25 per cent in 2002 from the previous year. It's not as strong a competitor to SGO's boar stud as it once was.
Henry deWolde, who retired recently as OSI's general manager, says the organization's future is still secure. The Ontario Ministry of Agriculture and Food's support of $642,000 "is a line item" in its budget, he says. DeWolde expects that OSI's Target Hog project, which he had shepherded, will continue in his absence. "If it doesn't, I'll be making a phone call to give it a push," he says.
The Target Hog project is being spearheaded by five large independent breeders -- Thames Bend Farms at Tavistock, Chuck Terpstra's Cranbrook Farms at Brussels, Bodmin Farms Ltd, Iona Station, John Gough's Novastar Farm at Mount Brydges and PSP Seedstock at Wingham.
Target Hog is a "birth-to-plate" program encompassing genetics from nucleus herds through their multipliers, commercial herds and packing plants, deWolde says. A couple of years ago, a trial that OSI called "Closing the Loop," involving Quality Meat Packers and the University of Guelph meat labs, found that differences in feeding, husbandry or barn systems were hurting commercial producers. Sometimes commercial farmers using the same genetics were getting very different results in critical profit-making measurements such as days to market and also in meat quality. Target Hog aims to correct that.
It's important to develop "value chains" so that breeders, multipliers and commercial operators work together to get the most out of the genetics, deWolde says.
Quality Meat Packers isn't necessarily looking for a leaner pig for its packing operation, says general manager Don Collis. It is looking for more consistent hogs to be delivered to the plant. Collis predicts that breeders will now be seeking to improve health status, feed conversion and growth rate.
"Super Nucleus" concept
OSI is the Ontario breeders' link to the national swine-testing program at CCSI. Brian Sullivan, who took over a few months ago as CCSI's general manager, says the national organization is getting over its own problems. There are currently 125 breeders enrolled in CCSI Canada-wide, with 9,000 nucleus sows in the national program, testing 90,000 pigs a year. Thirty of those breeders are from Ontario. Sullivan says breeders who had dropped out of the national organization are coming back. "Others are talking about it," he says.Among those who have dropped out is Quebec-based Genetiporc, which was a member of CCSI until a year ago. Ties have not been completely severed, however. Genetiporc remains a member of a working group for the genetics project and of a technical advisory committee.
CCSI is also giving another try to the "Super Nucleus" concept, whereby participating breeders or breeding companies would share their top genetics through the use of semen from elite super-nucleus boars, selected across all participating herds in Canada. "More recently, there has been less and less willingness to put the best boars in," Sullivan says.
This year, a more formal system of exchange will be put in place as a six-month pilot project. Any breeder on the system will identify his best boars in the database and genetics can be shared with others. If they aren't putting their best genetics in, however, they won't be able to take out. "It will be quite powerful if enough breeders sign onto it," Sullivan says.
In the face of competition from the big companies who can meet those needs, small breeders can focus on niche markets. Maple Leaf, the major player in Ontario, wants pigs with a backfat of 12 to 20 mm. But other packers want a fatter pig. Ypma cites a major regional packer as wanting 18 to 24 mm of backfat. As well, some packers have different preferred measurements for loin depth.
Ypma knows another processor that is developing a scale to look at the colour of fat, a factor that will be addressed by a combination of feeding programs and genetics. "If they can find a way to measure it and there is any possibility that it is genetically related, they will be asking for it," Ypma says.
Niche marketing comes with a price tag, however. Genetic testing will be more expensive, it will be required more often and, again, it will necessitate working from a bigger gene pool, Ypma predicts.
OSI's Gough says the provincial and national testing system can be helpful here. OSI has brought new genetics into its unit from Quebec and even from Sweden and has shared the information with other units. "We have access to some of the best techniques, too. Hopefully, (the breeders who dropped out) will see the benefit in bringing everyone along together."
Gough thinks the headway that breeding companies can make in Ontario is limited by two factors. One is the size of their nucleus operations. "If a breeding company says they have 3-4,000 sows, it's nothing compared to what I have access to" in the national program, he says. "It's a numbers game. The more you test and the more nucleus sows you have available to compare and share genetics from, the faster the progress you can make." The other factor is that Ontario producers have a lot of experience dealing with breeding marketers. "Commercial breeders are not necessarily swayed by a glossy ad campaign," Gough says. "The pigs have to work. If you have a good product, people respect that. That's what they are looking for."BP
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The Danes are coming! The Danes are coming!
Early last year, with relatively little fanfare, Danbred NA (North America) established it's first tentative beachhead in Ontario when it opened a boar stud near Drumbo in Oxford County. A few months ago, Danbred took over Shamrock Genetics, based in Lambeth and Varna, arguably the largest single supplier of gilts in the province. Suddenly Danbred's presence in Ontario took on a whole new prominence and breeders are taking note.Andrew Fenton, director of eastern Canadian sales for Danbred NA, says Shamrock's breeding program will be continued. Danbred has purchased some "hard assets" of the Shamrock company and most multipliers have signed their contracts with the new Danbred-Shamrock combination.
For now, Fenton says, Danbred and Shamrock genetic programs will run independently. Shamrock geneticist Peter Simedrea will be working with Dr. Tom Rathje, Danbred's Nebraska-based director of research. The first aim is to "benchmark" the performance of both companies' animals in side-by-side trials. "We aren't going to alter either program until we understand what they are doing," Fenton says.
For the 14 herds multiplying under the Shamrock name, "we've said business as usual," Fenton says, noting that Shamrock has a reputation for "very good service." Customers deal directly with the multipliers. Ultimately, he says, Danbred wants to be able to enhance customer service by bringing in technical services as well. These services would include improved benchmarking, internal genetics programs, internal breeding programs and nutritional recommendations.
"We want to establish feeding guidelines for the pigs," Fenton says. "We already did that for Danbred. At some point, there will be an infusion of Danbred genetics into Shamrock. I can't say when that will happen."
Shamrock's breeding program is very similar to the Danish system, Fenton says. The Shamrock method has a floating nucleus that moves from herd to herd. Selection is across all herds, using Estimated Breeding Values.
Danbred's presence in Canada has been growing since both Fenton and Dave Raich came into the company 18 months ago. Last year, Danbred established a nucleus operation in Alberta, using pigs from a nucleus in Nebraska, and also imported two groups of pigs from Denmark. As well as the two studs in Alberta, the Danbred boar stud in Drumbo and the Shamrock stud at Varna, there are what Fenton terms "arrangements" with two groups based in Winnipeg, Shamrock West and Spectrum Feeds. Each group has a 200-boar stud.
Fenton says that, formerly, Spectrum Feeds worked with Thames Bend Farms of Tavistock and is "in the process of changing over from Thames Bend to Danbred."
The major benefit for Shamrock is access to the nucleus base of the Danish program, Fenton notes. There are more than 9,000 sows in the Danish nucleus program. When North American nucleus animals are added, there will be nearly 12,000 nucleus animals. "This is one of the largest nucleus populations in the world," he asserts.
Fenton acknowledges that the genetic business in Ontario is very tough, and refers to "competitor-weary producers." With the great amount of information and the number of options that are available, he says, "it becomes very difficult for a producer to make a decision. You are often dealing with marketing information, not real data," he says.
However, producers do benefit from the lowest semen prices in Canada, he says. BP
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New technologies in the search for lean meat content
For decades, breeders have been chasing the goal of lean meat yields by targeting lower and lower backfat. There may still be some room to go with fat levels, but Brian Sullivan, general manager of the Canadian Centre for Swine Improvement, says the industry is now aiming directly at lean meat content, using new technologies such as ultrasound to measure the amount of lean meat on live animals.CCSI efforts will aim at increasing the size of the loin muscle while keeping fat thickness about where it is, he says. He predicts that there will more emphasis on different primal cuts, such as shoulders and hams, and even on increasing lean in the belly to improve bacon quality.
Packers are interested in meat quality factors such as colouring, marbling and the quality of fat between muscles, Sullivan says. If the fat quality isn't good, then the muscles will come apart.
There won't be just one way to manage pigs, Sullivan predicts, and there won't be just one pig to manage. Producers will have to "tailor-make" hogs, understand their genetics and feed for the market.
Efficiency of production will continue to evolve, Sullivan predicts, with a focus on growth rate, feed efficiency and disease resistance. Sow traits will still emphasize litter size and piglet survival.
Over the next few years, the pork industry will do something that the dairy industry did years ago -- develop a standardized score for confirmation. A few breeders are trying this out now, Sullivan says.
A computerized system will provide genetic evaluation for leg scores and underlines. It will be similar to a genetic evaluation for growth rates, Sullivan says. Breeders can incorporate that into selection decisions. "Now they just look at individual pigs," says Sullivan.
The genetic evaluation will also take into consideration all pigs in a family. This will eliminate environmental effects that can make a boar look good or bad. The emphasis will be on the family, rather than on the individual's record, Sullivan says. BP
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Will more co-operation hold off the big companies?
A few years ago former purebred operator John Lichti retired his purebred operation and made the transition to a farrowing sows as part of a 2,500 sow loop, using gilts supplied by John Gough's Novastar multiplication system and bred with semen from the AI stud at Woodstock. "He supplies a number of commercial operations like ours. We have a very homogeneous pig coming out of our finishing barn," says Lichti, a former Ontario Pork chairman.Lichti notes that Gough keeps up to date and that, with him, he knows the gilts are coming from the same multiplying herds all the time. "That's one of the nice things" about dealing with a domestic supplier. "Gough doesn't truck in from another province when he is short."
The disadvantage in dealing with a relatively small breeder is in the initial stocking of a large herd. "The small operator can be at a bit of a disadvantage," Lichti says.
Since going commercial, he has felt it would be possible for some breeders to band together to provide weaners co-mingled at 21 to 25 days of age for health reasons. They could produce 500 gilts or more in a week, enough to stock the big barns. However, this concept still hasn't caught on. "I don't know of anyone in the seed stock business who is co-mingling from co-operative herds," Lichti says.
If a breeder with 400, 500 or 1,000 sows "insists on going it alone, they likely won't be overly competitive," Lichti says. "They will find niches and they will find relationships. It will be difficult to supply large producers." They won't compete with the big international companies, Lichti concludes. "I think it would be a big leap to get the breeding fraternity to build that kind of a co-operative model.
"I still think there is opportunity for that, if they will work together."
Lichti expects that the international companies will continue to grow in strength and he wonders where the independent industry will be in five years. "How successful they will be, how much of a factor they will be, is anybody's guess. But I don't think they will disappear." BP
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Genetiporc speaks out
Genetiporc, with an estimated 40 per cent share of the swine genetic market in Quebec, remains an enigma to many Ontario producers.Some producers have noted its absence from the list of suppliers approved by Maple Leaf. Better Pork asked Genetiporc officials why. The answer, given in writing, is that "we are not on their list because we never asked to be a part of it...our customers have always got excellent performances. Genetiporc says it has a big share of Quebec's swine genetic market and says that it has a 10 per cent share of the gilt market in Ontario as well.
Genetiporc is a division of Breton Foods Canada, a fully integrated and family owned pork production, breeding and packing company. According to officials at its head office in Saint Bernard. Que., nucleus and multiplication herds in Canada total 35,000 sows, all PRRS, Mycoplasma pneumonia, APP and TGET free. Worldwide, Genetiporc nucleus and multiplication sows total 101,000, all with the same disease-free status.
Better Pork also asked Genetiporc officials why the company has withdrawn from the national program. They replied that Genetiporc took part in the national program from the mid-1980s until March of 2002 and "were dominating the system. In fact, Genetiporc was showing the best results ever seen by having 95 per cent of the top 100 Duroc boars, 90 per cent of the top 100 Landrace females and 89 per cent of the top 100 Yorkshire females."
However, in order to take part in the national program, Genetiporc must work through the provincial genetic program, which is linked to a mandatory health program. Genetiporc has its own herd health program, monitored by 22 veterinarians, and does not wish to take part in a parallel effort, officials say. As for its breeding efforts, "presently a team of 17 geneticists is working for Genetiporc, 12 in quantitative genetics and five in molecular genetics."
Lucan-based Premium Pork, which sells all of its production into the United States, has been with Genetiporc since stocking its first barn in 1997. High health and volume were the first consideration, says Premium general manager Greg Howard. Stocking a Premium Pork 2,400-sow barn requires an initial insertion of 700 gilts and 100 gilts a week thereafter. There were really only three possible suppliers, Howard says, adding that Premium needs a high health animal and not all breeders can supply that.
Furthermore, he cites as important maternal abilities and growth qualities, which affect cost of production. He says there's nothing wrong with the meat quality side either and the pigs are certified RN and halothane-gene negative.
Premium is now a multiplier, under license to Genetiporc, so volume is no longer a concern. Premium's barns consume most of the gilts raised and excess stock is sold.
Howard thinks that the ability to use molecular science to identify genes that are most desirable, thereby shortcutting the traditional selection process, will push the big companies far ahead.
He says that the technology "spins the phenotypical side up 20 times" and expects companies using that science will prevail in five years. BP
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back Show appreciation - it costs so little, affects so much
You can change an environment by accentuating the positive instead of focusing only on something done wrong
by RICHARD SMELSKI
Can you have a better business by saying "Thank you" or "That was a job well done" more often?Showing appreciation to business team members is an integral part of a successful business and something we overlook too often. Many of us assume we are taking care of our team or business partners simply by giving them a pay cheque. Yet research shows that workers who know what they are supposed to do, have the skills to do it, have a sense of control over how their work gets done and feel valued and appreciated are healthier and more productive. It simply comes with more appreciation and a thank you.
This attitude will carry over to employees, business partners and suppliers -- and eventually to better pig performance. Do you feel you communicate with someone more with money or with appreciation? According to numerous surveys, appreciation is the number one thing people want from their jobs, even before money and promotion.
In our home or business, many use the "gotcha" approach to recognition. We catch people doing the wrong things and ignore them doing the right things. You can change an environment by accentuating the positive instead of focusing only on something done wrong.
So say something positive when things are going well. Compliment your spouse for advice, your supplier for on-time delivery, your banker for understanding or even your child for a clean room. Many a partnership has been challenged because of the focus on things that go wrong, rather than an appreciation for all the time and effort of doing the things right. If you don't want to encourage poor behavior, don't spend much time on it.
There are dozens of inexpensive ways to focus showing appreciation for your team. Be creative but genuine with such things as thank you notes, personalized parking space, gift certificates. If you have to be critical, use the sandwich technique: say it between two compliments. Mark Twain once said, "I can go two months on one compliment."
It sounds like common sense to show appreciation, catch people doing the right things or simply say thank you more often, but I think that common sense is really not that common.
Let me relate to you a life experience. A new immigrant, a hog farmer, moved into a new area. After several months, he went to his neighbour friend and complained about the awful treatment and service he was getting from the manager at the local feed store. "He treats me awfully. He's always rude, arrogant and disrespectful to me," says the immigrant.
The neighbour said he knew the manager well and would talk to him. Several months passed and the new immigrant hog farmer asked his neighbour, "What did you say to that manager? He now treats me with utmost respect. You really must have told him off."
The neighbour simply replied, "I told him you thought he was a wonderful person, you respected him tremendously and you really appreciated doing business with him."
For every finger that points, four fingers point back. BP
Richard Smelski is a swine industry consultant and former Ontario government swine specialist.
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