Plenary sessions at the Banff Pork Seminar provide opportunities to hear people with wide-ranging expertise square off on the major factors influencing swine production.
Canada’s position as a net exporter requires its producers and processors to be mindful of a vast array of influences at play within a wide and ever changing variety of markets.
It was those factors that led the advisory board for the 2015 Banff Pork Seminar to wrap its conference around a theme of Adapting and Evolving, chair Bob Kemp said in his opening remarks.
Fitting in with that theme, the seminar’s plenary sessions invited speakers to share their insight into market forces both local and global, addressing the ways that animal welfare and social licence dovetail with market forces and economic trends.
Regardless of how they vote at the polls or reply to surveys, the proof in what consumers are demanding from the pork industry shows up in how and where they spend their money, said speaker Glynn Tonsor. He discussed the question of whether or not consumers are willing to pay for pork from happier pigs.
An associate professor in agricultural economics at Kansas State University, Tonsor said the answer is both “yes” and “no.”
Consumers may express high ideals when asked in polls or surveys how they feel about animal welfare, but will clearly contradict themselves when making their choices at the grocery store, he said.
Yet, while some may not wish to support their conscience with their cash, they may indeed be forced to pay the price in the long term, regardless of how they feel about gestation stalls, pain mitigation and stress-free transport.
Canada’s position as a net exporter and a major player worldwide means its fortunes rest on global influences, said Tonsor.
“The entire pork exporting country mix is dealing what Canada and the U.S. are dealing with. EU, Canada and the U.S. combined make up about 85 per cent of pork exports (worldwide),” said Tonsor.
“I think there is a reason to be very optimistic about the future of pork production. These whole animal welfare issues and discussions are just a cost of taking advantage of that current and very positive environment,” he said.
“Changes in the name of animal welfare are not being pulled into practice. American consumers say they’ll pay more . . . but that’s not what’s going on.”
Longer term, people who eat pork will pay more to get what they’re asking for as the industry adjusts, said Tonsor.
Meeting animal welfare demands will then become part of the cost of doing business.
During his discussion, Tonsor introduced an axiom that the Centre for Food Integrity had posted from its Twitter social media account in the fall of 2013: “Science tells us if we can do something. Society tells us if we should do it.”
Ultimately, the interplay of science and society will determine the operating environment for pork production in the United States and Canada, said Tonsor.
“The world is changing around you. You are better to change than to fight and resist,” he said.
Charlie Arnot, president of the Centre for Food Integrity, entered the discussion with his organization’s findings on the balance between science and public perception.
“Today’s food we know absolutely is safe, more available and more affordable than ever before,” Arnot said during his presentation.
“A lot of the credit for that goes to the technology and systems that everybody in this room and others in ag and food around the world have implemented, and yet we continue to see those systems challenged by consumers despite the fact that we have safe, affordable and abundant food.”
“Yet systems that brought that into fruition are more challenging.”
Arnot traced the challenge back to 1968, to the assassinations of Robert Kennedy and Martin Luther King Jr.; anti-Viet Nam war protesters squaring off with troops and police at the Democratic national convention, and the Viet Nam war itself, which was the first war that ordinary citizens could watch live, from the TVs in their living rooms.
Since that time, people have become more skeptical about institutions, including those that provide food.
From that skepticism arises the theory of social licence, in which the survival of institutions swings on their ability to maintain trust.
“If the public trusts us to do what’s right, they won’t feel the need to impose more social control,” said Arnot.
If that trust is broken, however, society has historically called for rules and regulations to hold institutions accountable for goods and services they provide, he said.
“What we’ve seen more recently is, it’s done through the marketplace. Activists and others will put more pressure on leading brands and those brands will come back and say, ‘We no longer want gestation stalls, we no longer want antibiotics.’”
Arnot made his own reference to the “can and should” question raised in the Tweet quoted by Tonsor.
“We’re very good at answering the ‘can’ question. We need to get a lot better at answering the ‘should’ question, because that’s where the questions are taking place today. You cannot substitute scientific verification for ethical justification.”
People are much more likely to act on how they feel than what they know, said Arnot. The industry must therefore engage with consumers in a way that is meaningful to them, he said.
Skepticism isn’t so much an element of criticism, but of interest, said Arnot. That gives the industry and opportunity to engage people because they actually are interested.
“The public wants information from academics, but they don’t want academic information. We have to translate PhD to ADD,” said Arnot.
The bottom line is that transparency is no longer an option. People need to see what you do and how you do it and they want to know that you have nothing to hide.
He offered delegates some advice on what the industry can do to operate within its social licence and not fall into the vice grip of social control.
He encouraged producers and the industry to talk about their commitment to do what’s right and embrace consumer skepticism.
“Open the digital barn door to pork production. There are so many things you can do,” said Arnot.
“Understand that who you are is as important, or more important, than what you know,” he said.
Ontario-based market analyst Kevin Grier and US-based veterinarian Howard Hill, president of the National Pork Producers Council, gave their views on where Canadian production fits within the North American and global communities.
The acerbic and ever-entertaining Grier spoke about the challenges facing Canadian producers and the things they need to build upon from an economic perspective.
“One of the good things about the Banff Pork Seminar is that it brings in people from all different disciplines in talking about the kinds of things that they’re expert in to help us all to prepare for the future,” said Grier.
Balance sheets provide a picture of the industry’s status from a variety of perspectives, including Canada’s position as a net exporter.
“Contrast that with the United States as domestically-focused industry,” he said. Even though the US exports more than Canada, the bulk of its pork is consumed within its own borders.
“The take-away from there is the dramatic growth in the United States as an exporter,” he said.
Perspective has to focus on margins, after many years of losses.
“Our industry is 25 per cent smaller than it was back in 2005, and of course, we lost farmers,” he said.
“You know the litany of challenges that the industry faced. In 2009, just when we thought we were going to have a good year, we had H1N1. It turned what could have been a profitable year into a relatively miserable 2009. Everything that could happen to go wrong seemed to go wrong over that period of time.”
Zoom forward to 2014 and so many of the factors that influence Canadian profit margins have changed, including exchange rates that dramatically affect the value of Canadian pork on international markets.
Grain prices were the other major factor influencing profitability in Canada, said Grier.
He found a glimmer of hope in domestic demand for pork, noting that the demand within Canada has remained steady in spite of rising prices.
“It’s too early to say we’ve got some turn around, but maybe we have.”
Pointing to Tonsor’s presentation, Grier said he found it “kind of depressing” that North Americans may choose to eat less pork, but will have to pay more for it because of legislation and regulation.
At the same time, said Grier, there have been some encouraging statements about the nutritional value of animal fat and red meat, which should encourage more sales within Canada and the US.
“This is big stuff, if you ask me.”
There are also positive changes on the export side, all of which help Canada maintain its competitive edge, said Grier.
Processing numbers are down as well as the sow herd, although there has been some expansion in capacity through processing at a couple of key sites, he said.
Packers have moved to more vertical integration, with roughly 40 per cent of the sow herd on the Prairies now owned by major processors, said Grier. While the total numbers are still down, double shifting has increased the number of hogs being slaughtered at some plants, he said.
“In the big picture, I do believe we are globally competitive. We have to remind ourselves that we enjoy many advantages that are the envy of pork producing regions around the world,” said Grier.
“Where is the evidence that we cannot compete in global markets? All of these things that we like to complain about, there is no evidence in the facts.”
Hill addressed the same general theme from a somewhat different perspective, with the disclaimer that there had been a number of changes since fall, when he first wrote his presentation.
He said the rewards of fighting various challenges facing the industry are worth the effort.
Those challenges for producers in both Canada and the US include the ongoing issues with country-of-original labelling, free trade negotiations, a breakdown in exports to Russia and finding opportunities for growth.
Protein demands for pork are increasing at key points on the globe and both Canada and the US have an abundant supply of pork that can be exported to those markets, said Hill.
“As pork producers, we need to be diligent in fighting for fair legislation and regulations, including legitimate (Free Trade Agreements) that will continue to allow us to expand our industry and provide the world with an abundant supply of pork,” he said. •
— By Brenda Kossowan
