Better Pork - February 2004
BEHIND THE LINES
by ROBERT IRWINAcross the Pacific Ocean in Tokyo, a housewife in a supermarket picks up a package of branded boneless loin chops and knows that they came from animals raised on your farm in Canada.
Less than a decade ago, that would have been laughable. It's a reality now for some farms in Ontario. It will shortly be a fact of life for a lot more operations as processors rush to adopt highly computerized and DNA-verified traceback systems that will encompass more and more of the food they produce. It's all about polishing up the "Canadian" brand, somewhat tarnished by BSE and SARS, in order to maintain consumer confidence.
That is the theme of this month's cover story, which looks at the Canadian pork industry's strenuous and almost obsessive efforts to maintain that confidence, especially with very discerning foreign buyers. The question that remains unsaid is this: Can an industry that is so dependent on exports maintain its viability in the pickiest pork market in the world by putting even more resources towards maintaining the market share that it has?
These efforts are a sign that the world has changed. As we gathered information for this story, we came across some interesting and otherwise largely overlooked facts. Last fall, as the pork crisis deepened, the direction of pork industry giant Maple Leaf Foods Ltd. quietly took a sea change.
Maple Leaf's Elite Swine, which barely began its foray into Ontario in 2002, announced that it had stopped expanding and was now looking at stricter financial management of its resources rather than growth. No more sow barns would be built beyond Elite's 125,000 capacity, although more finishing barns might be added to finish the sows' output. Such is the effect of the current pork industry crisis.
The new strategy is to hang on to what you have, intensify your financial management and, presumably, see who and what is left when the crisis shakes out. That's good advice for anyone involved in the pork industry at the beginning of 2004.BP
© copyright 2004 AgMedia Inc..
back Better Pork - February 2004
Coming soon: A live swine tracking system from farm to slaughterhouse and traceability to the consumer
Industry organizations, meat packers and government agree that traceability is essential both for food safety reasons and to maintain our international markets. But who will pay -- producers or processors?by DON STONEMAN
The ultimate comprehensive traceability system is coming to your pig farm, and likely sooner than you think.Both major Ontario packers, Maple Leaf Foods and Quality Meat Packers, are proceeding full speed with the adoption of full traceability systems as their best means of maintaining crucial overseas markets in the face of stiffening competition.
Traceability is considered so important that Maple Leaf is sharing its DNA traceability project, announced last March, with the rest of the industry. The project uses DNA technology to trace meat samples using a database containing the genetic fingerprints of sows in the Maple Leaf supply system. The Canadian Meat Council is seeking federal grant money to fund the next stage of this development.
On the producer side, the Canada Pork Council is launching a live swine tracking system from farm to slaughterhouse this year to bolster consumer confidence and to reduce the damage from a possible foreign animal disease outbreak. The current crisis in the pork industry is driving the traceability issue for everyone.
Quality Meat Packers is in the process of rewriting its data collection system according to Don Collis, vice-president of its fresh meat business. The goal is to facilitate farm-to-product traceability for a number of marketing initiatives. "People want to know where the raw material is coming from, and under what condition (the pigs) were grown," Collis says.
The global nature of pork markets calls for stringent traceability, agrees Michael Detlefsen, vice-president at Maple Leaf Foods. "Japanese customers are pressuring us to increase the content of our traceability."
The live swine tracking system would improve Canada's market position vis-à-vis our international market competition, the United States and Denmark, says Tavistock producer Clare Schlegel, Ontario Pork's past chairman and its representative on the Canada Pork Council. Both federal and provincial governments see traceability as key for food safety reasons and also for international and marketing positioning.
Why is it so critical now? One reason is that the Bovine Spongiform Encephalopathy (BSE) crisis in the beef industry has spilled over into other meat sectors. Other food and health related crises in the last year have also taken a toll. Then there are shifts in world currencies and, on top of that, tremendous competition from our neighbours to the south.
Moreover, Canada's pork industry is threatened by three major trends in the critical Japanese markets, Detlefsen says. First, Canadian producers have lost their feed cost advantage over the United States. Previously, there was an $18 a pig cost advantage accruing to Canadian producers, he says, but during the last year, this turned into a $5 a pig advantage in favour of the United States. Detlefsen blames this change on the most recent U.S. Farm Bill, drought in the West and the spread of vomitoxin in grain growing areas on the Prairies.
Then there is the recent appreciation of the Canadian dollar. "Our ability to sell based on a weak currency has been eroded," Detlefsen says. Canadian producers are now "offside by $15 to $25 a hog, depending on whom you talk to."
The third trend is the twin impact of BSE and SARS. "Canada always had a reputation for clean, healthy pork, for food safety and high quality," Detlefsen says. The SARS outbreak in late winter, and the BSE crisis in May "have impacted world perception and in particular Japanese perception of Canada." The combination "has forced the Canadian industry into a differentiation strategy," he says.
Maple Leaf Food's decision, delivered in June, to take meat and bone meal out of rations fed to pigs it processes, was based on those perceptions, Detlefsen notes. Japanese customers, in particular, were asking for assurances that hogs being sent to them did not have meat and bone meal in their swine feed. Traceability helps us to restore a sense of safety in the food, he says.
In Detlefsen's view, Maple Leaf didn't have a lot of choice. "Our understanding is that all three of the major integrators (in the United States), Smithfield, Premium Standard and Seaboard, are meat and bone meal free for products going to Japan," he says.
"The pressure is mounting because of a variety of issues, whether it is BSE or swine fever," agrees Quality Meat Packers' Collis. How animals were medicated, or whether they were medicated at all, is another concern that buyers have expressed.
"Validation" is the buzzword
Detlefsen and Collis both hope that new technology will leapfrog the Canadian industry ahead of the competition. As an example, Collis cites a program which Quality Meat is running for a group of retail customers in Japan using a "paper" traceback system on five farms that have been approved as suppliers to a particular program. Retailers want to be assured that the five farms are the only ones supplying meat they bought for sale in Japan.Though this involves a lot of paperwork, Collis expects that by the spring this program can be run using the upgraded computer data collection system at Quality Meats. He says that the Viande du Breton certified natural program run in Quebec for export customers in the United States is a similar concept.
The newest buzzword in traceability is "validation" -- the ability to prove that the attributes and claims made about a specific product are true. Validation "ties very neatly into traceability," Collis points out. "You are trying to deal with a number of issues -- from an operational perspective, from a safety perspective and from a traceability perspective." Once a validation system is in place, "it will enable us to literally close the loop."
Clare Schlegel concurs that the BSE crisis in Canada has certainly speeded up the process of tracking animals on farms as a means of dealing with a possible foreign animal disease crisis. "This is simply one step further down the path of being able to trace food from the farm to the plate."
Traceback capability is being developed for all aspects of food production, Schlegel notes. The Electronic Commerce Council of Canada is involved in bar coding meat through stores. The same technology is being applied to fruit and vegetables, beverages, and bakery goods. Agriculture Canada is funding this initiative and has also provided money for the live swine tracking initiative.
These developments raise a number of questions, for which those in the industry will be seeking an answer. Who will pay for adopting and maintaining these technologies? It appears that while the industry is going full tilt towards traceability, the "who pays" question hasn't yet been answered. Schlegel says that for technologies from the processing plant to the plate, "one would assume they would be addressed by the processors and the retailers."
What is the benefit for producers? "One would hope there would be some value added," Schlegel says, noting that this is where producer organizations have a role. "You need the marketing boards to establish this positioning," he says.
What does traceback mean for meat processors? Export customers in particular are picky about management practices on farms and want to be able to know where the pig came from, Collis says. Quality's traceability program will record when a pig was killed, when the carcass was cut, and into which box the cuts of meat were put. It is also critical that product which deviates from standards is also traced.
When is this important? "In the event that you wanted to demonstrate that your product was wholesome and that it wasn't part of a recall," Collis says. Likewise, domestic grocers are looking for a specific size, confirmation and sourcing origin, he says. The specifications differ from one grocery chain to another as they all try to get, and maintain, the loyalty of customers. "For lack of a better word, I call it the pedigree of their purchases. The competition necessitates it."
Will these technologies help processors make more money? Traceback won't necessarily "capture more margin dollars," Collis says. "Often the difference between adopting new technology and not is the difference between being in the business and not."
Time-consuming testing
Detlefsen says Maple Leaf is "99 per cent sure" that the DNA tracing technology it is developing will work. He says that Maple Leaf is in the final stages of planning how it will execute the DNA testing. This involves blood testing all of the sows in the barns supplying a plant in Quebec and another plant in Alberta. Both plants ship pork exclusively to Japan.Each plant kills 5-7,000 hogs a week, the production from about 15,000 sows, raised mostly in 1,500- or 3,000-sow barns, so the logistics of testing all the sows supplying those plants isn't that difficult. However, it will be time-consuming.
It will certainly be easier than testing pigs going through Maple Leaf's Brandon or Burlington plants, both of which kill about 45,000 hogs a week from a much larger number of barns. "We can iron out bugs" and "generate some learning" that can be applied to the larger plants, Detlefsen says.
He is reluctant to discuss the cost of blood typing and DNA testing each sow because it is under negotiation with a contractor. However, Detlefsen says that the original quote of $50 a sow "is an out-of-date number." The new cost "will be considerably south of that," he says.
Given the lack of profitability in the pork industry as a whole, Better Pork asked Detlefsen if this is a good time to be going ahead with this project. "Absolutely," he replied emphatically, citing the Canadian industry's loss of competitive advantage. "We have to find ways of creating points of difference. Particularly in key markets in Japan. I can't think of any better time."
Competitors are not standing still, he points out. The Danes are likely a step ahead of Canada in terms of differentiation and traceability and it appears that "on paper" American companies might be as well, but Detlefsen adds that the big integrators have weaknesses. "People at the barn level are not as highly qualified as those in some of the Canadian systems," he says. "If you have a fairly basic traceability system, it is very prone to human error."
He also wonders if the American systems will stand up to accreditation. He doubts their systems are as advanced as the DNA testing system, but he doesn't know to what degree they are computerized.
Certainly, the Canadian industry is in crisis and it remains a question of how Canada gets back its competitive advantage. "Part of that is by taking costs out of the system," says Detlefsen. "Part is by differentiating, creating products that have points of difference that are attractive to the consumers we are targeting."
His bottom line on DNA testing and traceability is that "if we don't do this, we will be in much worse straits two or three years down the road." Processors are losing money, there is a continued protein glut in North America and Canada's market share in Japan is slipping. "We need to maintain and build our presence in Japan for the health of the Canadian industry," Detlefsen says.
In Canada, there is simply a surplus of hogs relative to processing capacity. Detlefsen blames that on improved technology, breeding practices and rapid growth, especially in Western Canada.
Detlefsen says Canada's "non-competitive position" prompted Maple Leaf to offer its DNA technology to the industry in general. "This is so important to Canada's competitiveness that we are willing to share this with producers across the country," Detlefsen says.
Development of the technology is expected to cost $750,000. Detlefsen says federal funding is expected to pick up half of that cost, via the Canada Meat Council. "The deal is that we will share it with the rest of the industry once it is developed and tested," he says.
Canada Pork's Schlegel says that he hopes implementation of the live swine traceability system will begin in early 2005. Pilot testing begun late in 2003 will give us information monitoring and identification systems, he says. In Quebec, the system is being tested at the Olymel plant at Princeville. In P.E.I., there is a test at Garden Island Meats in Charlottetown, and in Manitoba at Maple Leaf's Brandon plant.
These pilot projects should answer questions about how much this will cost, Schlegel says, and also who will pay. Can animals be tracked for 10 cents a head by tracking groups of several hundred pigs at a time through three site systems. Or will individual animal ear tags be needed, as with cattle? If costs are on the low end, traceability "may be considered as insurance against foreign animal disease and the farmer may need to carry it." If costs are $3-4 a pig, "it's impossible for the farmer to carry the cost," he says.
Some producers are already tracking their animals. In some multi-site systems, they tattoo pigs shortly after birth and tattoo them again at the end of the finishing phase, before shipping to market. Some more decisions are necessary here, Schlegel says, and the pilot project will likely help.
For farmers who are using "real time" electronic records, a trucker will have a portable computer unit, upload information on the pigs and send it ahead to the packing plant so that the packers know how many animals are coming and from where.
But will farmers using paper records be able to continue to do so? Schlegel says it might be possible for them to keep their paper records in their farm office until it is time to ship and then upload information to a national database. The pilot projects will tell the story on that, too, he says.
The traceability study is another layer of food safety on top of a national Geographic Information System system, which will identify where livestock operations are located in every province.
Schlegel says the national system "is caught in the dilemma of speed versus thoroughness. We are trying to take enough time to do it properly. Not doing it is not an acceptable solution," Schlegel says. BP
© copyright 2004 AgMedia Inc..
back Are we ready to re-engineer the industry?
We need to take ownership of our product through to the consumer and accept that consumer priorities have changed. That means starting with a clean slate rather than continuing to retool with old ideas
by RICHARD SMELSKI
Do I have the mental stamina to succeed in this swine industry? That is a question we need to ask ourselves, for I believe we are due for a major re-engineering of our business and we must be prepared to participate in this process and accept its consequences.Let me put some fundamental business questions to you.
Depending on your answers to these questions, you will probably position yourself in one of two categories -"family farm" or part of a major food chain. Neither is wrong, but the choice of the system you pick may influence the kind of organization you will have -- for example, local versus global focus, family versus non-family labour, land-based or not, marketing versus production orientation, independent versus interdependent, diversified versus specialized, managed versus managing, own or outside financing, and so on. In either case, I believe we are due for a fundamental re-engineering of our industry.
- What business are you in?
- Who is your customer?
- Who is your competition?
- Do you have the desire and capability to change?
Taking ownership of our product through to the consumer is an evolving pattern. The consumer ultimately pays all the bills and has the ultimate choice, regardless of our opinions. To satisfy the consumer requires an integrated and information-based business. Instead, we have departmentalized our business (e.g. multisite, contract barns, health ratings, market grids, etc.) We often produce to the exit of the barn and become suspicious and antagonistic after that. We know consumer priorities have moved from quality first, price second and variety third to quality first, food safety second and price third. How have we changed to accommodate this new hierarchy?
Who is your competitor? Many think it is the neighbor next door, while others feel it is the big conglomerate. How about the challenges of mad cow and foot-and-mouth diseases, animal rightists, government regulations, foreign subsidies, downstream requests such as meat bone meal (MBM) exclusion, liability concerns, labour recruitment, and new ones that we haven't even dreamt about?
One of the best global examples of successful re-engineering exists in Quebec. The Quebec Roundtable enables major participants in the province's pork industry to communicate their concerns and focus on common solutions. It has existed for over eight years and is proud of its successes. We are often critical of Quebec's support programs and my response would be that it indicates that its Roundtable works.
How do we participate in re-engineering the system, rather than having one imposed upon us? Let us start with a clean slate rather than continuing to retool with old ideas, otherwise we will only get more segmentation, clustering and antagonisms.
Let me use as an example the quest for better tasting pork. We know the technologies to produce better pork -- an optimum quantity and quality of intramuscular fat in the lean which, in turn, will encourage better tasting pork. We know that it will probably be from certain terminal lines of Duroc boars, supplemented with animal fat and on a controlled feed curve. But what seems like a simple request offering great benefit gets impeded by "the system." The grading doesn't recognize intra muscular IM fat and in fact discourages it; the sow person breeds for numbers not meat quality; corn-soy rations are not ideal; MBM would be a benefit but it is restricted; trucking is difficult; the processing system needs to sustain the quality; and the market has to differentiate the product. It seems ironic that we are one of the most advanced economies in the world and yet we can't communicate and focus on fulfilling a simple customer need. Do we need to re-engineer our production system or our beliefs? BP
Richard Smelski is general manager of Ontario Swine Improvement Inc. and a former Ontario government swine specialist.
© copyright 2004 AgMedia Inc..
back The use of shelterbelts to reduce livestock odours
As we better understand the science behind windbreaks or other screening techniques, perhaps we may be able to reduce setback distances or secure greater acknowledgement of the effectiveness of separation buffersby MURRAY BLACKIE
To date, the use of Minimum Distance Separation (MDS) to help minimize land use conflict generally seems to have worked. Adequate distance buffers do seem to lead to fewer complaints about odour and other nuisances and fewer complaints are a reflection of an acceptable level of tolerance to the nuisances.New and expanding operations are consistently larger than in the past. They use liquid manure with larger, open storages. Barns are longer and have more points of emission. New operations may not be located where the owner lives. They may smell bad from time to time. These and other issues may create difficulty in developing the needed tolerance necessary if conflict is to be avoided.
MDS is determined by considering the type of animal, the size of the operation, the degree of expansion, the type of manure system and nearby land use, existing or proposed. MDS is used by municipalities as a prerequisite to the issuance of a building permit for new or expanding livestock operations and as a component of an acceptable Nutrient Management Plan with adequate manure storage.
The use of windbreaks and other screening has been accepted for some time as helping to create "out of sight, out of mind." Would inclusion of such measures help to reduce setback distances or lead to greater acknowledgement of the effectiveness of separation buffers? Would such remedial measures help create greater neighbourhood tolerance, especially where there is local opposition to new or expanding operations?
At last November's Nutrient Management conference in Shakespeare, participants heard Todd Leuty, agroforestry specialist with the Ontario Ministry of Agriculture and Food (OMAF), expound on the use of shelterbelts to reduce livestock odours and improve bio-security. Todd discussed how windbreaks and shelterbelts reduce odours by:
- Facilitating dilution and dispersion of odours;
- Promoting the deposition of odorous aerosols and dusts on the windward and leeward sides of windbreaks, such as we see with snow fencing;
- The collection of odour-causing chemical constituents in the tree wood;
- The physical interception of the odorous particles.
An attractive visual barrier may also make the point that extra efforts are being made to minimize problems and offensive odours.
To read more on dealing with odour conflicts, I recommend the OMAF fact-sheets, "Reducing Odour and Noise Conflicts between Rural Neighbours" (AGDEX 711) and "Odour Control on Livestock and Poultry Farms" (AGDEX 700). BP
Murray Blackie is the former agricultural specialist with the Ministry of the Environment and is now a consultant, expert witness and writer on agro-environmental issues.
© copyright 2004 AgMedia Inc..
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