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| On one hand it's not all bad for someone else to pay for your asset and get a little cash for your time, on the other hand it's nothing like traditional pork production. We've gone from a very independent thinking group of folks who would exit the market at times if they felt things weren't going their way to a much more submissive model where the packer bows to the grocery store/consumer, the integrator bows to the packer and the grower submits to the integrator. Part of the traditional system included the feeling/impression that there was a 'right way' to do things and anything else was wrong. I think this is shown perfectly in the fierce competition in livestock showing. Guys might sell their pigs to 4h'rs to grow out and show, and while the competition looks like it involves an 8 year old boy and a pig, it probably has more to do with breeders and their version of 'right'. I have no problem with shows and it appears to be a great way for folks to experience animal ag.
The list of 'unindependent' stuff includes:
1. fixed payment with generally no connection to the market
2. you basically work for the integrator (they supply the feed and pigs and some guidance).
3. it takes a very large capital investment (which many banks are more than happy to provide)
4. Us wean to finish guys grow pigs wrong and it will never work (not convinced of that one :-)
Why did this happen? Probably a chicken/egg situation, but consumers have lots of demand for low priced food and not so much for high priced food. Also, generally less folks want to be involved with livestock on any significant scale (a few show pigs maybe, but not 100 or 300 or 1000 sows). Less folks want to work in packing plants. The answer to "less folks" is usually some sort of consolidation and economy's of scale (if they exist). Some might suggest a sort of 'they took our jobs' point of view, but I'm not so sure. Contract growing didn't spring up and move more traditional farms out - usually the traditional farrow to finish farms were all but gone first. Interestingly, the guys still around that could supply most of their own feed needs actually have an advantage right now over systems that have to buy all the feed.
All that said, I still think the reason for the struggle between traditional and contract farrowing/growing is mindset/culture - I'm not sure that ever gets completely resolved since it's not just a new feeder or a new gate system to get used to, it's how you do business that changed. So, I guess I'll let my friends refer to me as a 'non-livestock' guy and I'll continue growing somewhere around 1.9M lbs of pork (lean weight, but it all gets used) every year. Hmmm.
thanks,
Pat | |
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Hog finishing contracts
