Alternative or Niche Swine Enterprises
Livestock Update, October 2003
Allen Harper, Extension Animal Scientist - Swine, Tidewater AREC
Major changes in structure of the U.S. and Virginia swine industries have occurred over the past 15 years. The number of totally independent producers has declined dramatically while integrated and contractual production has increased. Under this new paradigm, there is the potential for some producers with an entrepreneurial spirit to take advantage markets for pork that is produced using "alternative" methods to larger scale confinement production.
At a conference sponsored by the National Pork Board (NPB) last year, the term "nichepork" production was defined as "identifying and supplying pork in a way that a certain group of customers prefer or see superior value in, and that does not use the traditional commodity marketing channel." A logical question is can set hogs and pork apart for a niche market customer? There are several possibilities such as the customer recognizes or perceives the pork to be:
It is important to state that it is the niche market customer who is making the final determination on these qualities. For example, a producer could argue that market hogs raised in a slatted-floor confinement barn are actually exposed to fewer environmental stressors than market hogs reared in a dirt lot or deep bedded system. But, it is the particular niche market customer that prefers to consume pork from the outdoor or deep-bedded production system. It is also important to recognize that niche markets are primarily small specialty markets and there have been a limited number of producers involved in producing pigs for niche markets for many years. In Virginia for example we have had various producers that raised hogs specifically for home slaughter markets, for 4-H club project pigs, for a custom bar-b-que service, for bio-medical research and for a family sausage brand. Based on the NPB definition, each of these could be considered nichepork.
A recent development in producing pork and other meat products for niche markets has been the establishment of process or standards verification programs. Examples include the USDA Agricultural Market Service Process Verification Program, the USDA Certified Organic Program, the guidelines of the Animal Welfare Institute, and the Humane Farm Animal Care organization's "Certified Humane" program. The procedures and requirements differ depending on the organization. Basically producers agree to abide by an organization's requirements for production methods of pigs and pork and consequently their production becomes certified or process verified to assure niche market customers that special guidelines have been followed. Some of these programs can be quite restrictive in what is and is not allowed in the production system. Table 1 illustrates some of the requirements for pork production in the Humane Farm Animal Care (HFAC) organization's Certified Humane program.
Table 1. Selected requirements for pork to be labeled HFAC "Certified Humane" *
*More detailed information can be found at the organization's website: www.certifiedhumane.com
In some cases producers have been brought together in networks to produce niche or specialty market pork. One example is Niman Ranch Pork Company. This Midwest based organization coordinates production and marketing of hogs produced under a specified set of conditions set by the Animal Welfare Institute. Ultimately pork from the Niman Ranch System is sold to selected restaurants and other specialty markets. Producers must sign a standards affidavit and are subject to inspection by representatives of Niman Ranch. Within the past year, Niman Ranch Pork Company has started to recruit producers in the mid-Atlantic region, particularly in North Carolina. Pigs in the system will be sold and slaughtered at a packing plant near Warsaw, North Carolina. A $6.00 per hundredweight live price premium is being offered that is adjusted based on mid-west live hog prices and season of the year. Additional information can be found at www.nimanranch.com or at 641-998-2683.
Like any agricultural enterprise, producing pork for a niche market requires careful assessment and planning. Producers must honestly determine if they can meet the standards of the niche market. They must assess market price and market volume (gross returns) and the level of associated risk. They must determine as accurately as possible the true fixed and variable (operational) costs of production; and finally, they must objectively assess the real potential for financial returns to land, labor and management.