In this edition of Pork Pod, National Pork Checkoff CEO Bill Even reviews a variety of issues, including the current hog market situation. Even also highlights the Pork Checkoff investment in international market development and the current partnership with Google.
Bill Even, CEO, National Pork Board
Don Wick: 00:00 From the Pork Checkoff in Des Moines, Iowa, it’s Pork Pod. Pork Pod, a look at the hot topics in today’s pork industry. The Pork Checkoff is working for you through various forms of research, promotion, and consumer information projects. I’m Don Wick speaking on behalf of the Pork Checkoff and today we’re pleased to have as our guest Bill Even, CEO of the National Pork Board. Variety of topics to discuss, but certainly top of that list, what’s going on with the profitability picture? The markets have been somewhat ugly as of late. Bill, give me your assessment. What, uh, what are you seeing as far as this hog trade?
Bill Even: 00:33 Yeah, so the, the US pork industry has been growing very steadily over a number of years. We’ve got record number of hogs right now in the United States and a lot of that build out of the new plants, the new facilities, the new opportunities all really predicated on the growth of international demand. You know, pork is the number one consumed meat protein in the world. Forty three percent of all meat protein out there that’s consumed is pork. Chicken comes in second in the, in the mid thirties and beef down in the twenties. So when our producers were looking at this opportunity globally, we’ve started to ramp up production, uh, right now, uh, that’s been impacted by the tariff situation and the prices have moved downward to reflect that.
Don Wick: 01:15 What kind of tariffs are we talking about? What we hear a lot about the tariffs, but can you give us an indication of what kind of impact that’s having on hogs?
Bill Even: 01:23 Absolutely. So the China tariffs hit the pork industry back on Easter. And so, uh, we’ve been under a Chinese tariffs, Currently, the tariff in China is over 78 percent for pork going into that country. Mexican tariffs started out at 10 percent on the fifth of July they went to 20 percent. And we’ve seen the commensurate decline in, in both the product value as well as volume moving to some of these places. And maybe just to give you a little bit of an example, China bought over a billion dollars worth of US pork last year, billion dollars with a B. And a lot of that pork are things that we don’t eat in the United States necessarily, you know, things like pigs feet for example. And so when that market really dried up, uh, the, the pork producers of this country really are scrambling, trying to find someplace else to export those products. Problem is the pork cutout, you know, the value of the, of the hog itself to the market has declined precipitously because of that. And so then also the live hog prices have gone down as well.
Don Wick: 02:24 At that same time we’ve seen among that, in that pork carcass value, bellies, in particular have taken a huge, huge loss in a relatively short time.
Bill Even: 02:33 Yeah, it’s all about Bacon, right? That’s where bellies make the Bacon. And so just about a month ago, bellies, we’re about $170, they’re down about $98 now. So a pretty big drop.
Don Wick: 02:45 When it comes to trade and the Pork Checkoff and your relationship with the USMEF, it’s all about relationships. You are in those markets for generations and working to build a demand on the, on the export side. What happens when we’re in an environment like this where, where that’s also very volatile?
Bill Even: 03:03 Well, it’s very important to US Meat Export Federation working in partnership with the Checkoff handles our international marketing efforts and the producers that I’ve been talking to, the one thing on their mind is moved the product, move the product, move the product, you know, what is the Pork Checkoff doing in that space? So we’ve amped up our spending on international marketing. It was around close to $9,000,000 of Checkoff money that’s going into that space right now. And addition to that, we’ve been working very closely with the USDA. I was out in Washington DC two weeks ago and we’re mapping out a plan with the USDA to really put some emphasis on some of these foreign market development pieces. Uh, the Pork Checkoff is working with a brand new program we’re calling Pork 2040. And what that means is what are we doing to understand some of these other emerging markets and what are the consumers going to look like and what’s the opportunity over the next 20 years? And we need to be in some of these markets because we found out right now we can’t put all our bacon in one basket. If there’s a tariff problem, we have to have other markets that, uh, are buying our product.
Don Wick: 04:07 So what kind of markets are we talking about with the 2040 plan?
Bill Even: 04:10 So there’s been a big interest in Latin America. Um, the, the South America, Central America, there are folks that really enjoy pork. It’s part of their diet, it’s part of their culture. And so you look at, say, like the Free Trade Agreement to Columbia, the recent opening of the market in Argentina to US pork. Those opportunities are starting to emerge now as you look south of the US border. And that’s an example of one area. In addition to that, you’ve got Vietnam is a really rapidly emerging market, uh, with a large growing population. And they love pork as well. So sometimes, uh, as, as the years go by areas, that might’ve been a enemies in the case of Vietnam are now rapidly moving into markets for US agricultural products.
Don Wick: 04:52 What about on the domestic side? Obviously it’s a great value if you go to the meat case today, are there things being done to, to enhance demand here at home?
Bill Even: 05:02 Absolutely. Uh, you know, we’re pretty excited here, starting right at the first of August, uh, we announced a partnership with Subway. And Subway really in the eastern coast of the United States. You know, they’re, the large bulk of the US population is in that East Coast corridor as well as out in the California market. So Subway announced a three brand new pork sandwiches that they’re featuring out on the East Coast in over 5,000 different stores and very proud to be partnering with Subway on their work there. So if you don’t see it, maybe in your local Subway store here in North Dakota, might want to contact your local franchisee and see what’s the possibility of bringing those sandwiches nationwide.
Don Wick: 05:40 In the recent history, we’ve seen the Pork Checkoff really taking a different approach and trying to reach those consumers. Really a more digitally driven kind of that B to B type concept.
Bill Even: 05:51 Absolutely. So when you look at traditional marketing from the Pork Checkoff, a lot of it was done through traditional radio, TV, print ads. Well, it’s clear that the world has changed and you know, you take a look at your kids and how are they getting their information? They’re getting it off of their smartphone and that’s where people are living now. And so the Pork Checkoff partnered with Google last year and we’re doing very aggressive direct to consumer digital marketing now. So you may not see it in the traditional sense, but we are reaching more people than ever. And the exciting part about that is you used to have a spokesperson, right? Maybe a face or a celebrity or somebody that might be touting pork. You know, years ago was a Peggy Fleming for the, for the Pork Checkoff. Today people are living on Youtube and many of the folks on say the Youtube channels, they are these people out there that are hugely influential. They have millions of followers online. And so we’re partnering with people that are very influential on, in the digital space, in the Youtube space, talking about food, talking about health, talking about lifestyle and how pork can fit into that.
Don Wick: 06:58 So when we talk Pork Checkoff, we’re talking promotion, research and education. Research, we know there’s always consistent work being done. I’m curious on the, on the education side, there’s a continued focus on sustainability. How’s the Pork Checkoff part of that discussion?
Bill Even: 07:14 So the Pork Checkoff 10 years ago built a program called We Care and it was really the vanguard of the movement to understand what are the ethical principles of US pork production. So the Pork Checkoff was very proud working with producers to understand who we are, what we are and how we raise our pigs. Because if people are comfortable on how we’re raising our pigs, people are comfortable about buying pork in the store. And so as we celebrate that 10th anniversary this year, I just came from a meeting in Minneapolis two days with a leading producers from around the nation saying, all right, we’re not going to rest on our laurels. What’s next? And when we look at that, what’s next, It’s actually getting back out into the supply chain, talking to the restaurants, talking to the grocery stores, talking to consumers, uh, letting them know how we raise pigs. And consequently, uh, that opportunity is going to start emerging. You’re going to hear more about that from the Pork Checkoff here in the coming months.
Don Wick: 08:07 From an industry standpoint, does that mean more things like traceability or, or what, what exactly does that mean?
Bill Even: 08:13 So in a large part, the pork producers been out there, you know, their heads down, plugging away, doing the work. They do raise pigs. We’ve got a real opportunity here to take some credit for the work that we’ve already done. And when prices are in the tank right now, like they are for a lot of ag products, including pork giving the producers something positive to talk about from their Pork Checkoff I think is very important and frankly they ought to be proud about it. They’ve done a tremendous job. We’ve reduced our environmental footprint in water and in greenhouse gas emissions and in land use over the years. In addition to that, animal welfare is dramatically improved, uh, with the way that we’re taking care of our pigs today. It’s something that we ought to be able to talk about without any, uh, without any embarrassment.
Don Wick: 08:56 As far as research, are there certain focuses at a certain emphasis at the Pork Checkoff is taking right now?
Bill Even: 09:03 Sure. On the research side, a really understanding our connection to the dietitian community. Uh, it used to be dietitians were maybe found a in a hospital or in a school system. Today it’s not uncommon to walk into any grocery store and find a registered Dietitian on staff. These folks are fantastic. They are the ones that help the average person like you or I understand what we’re eating and how we’re eating and living a healthy lifestyle, and so we’ve been working really, uh, at, uh, how an entirely new level with a Checkoff of bringing dietitians to the farms. Uh, we, I believe we’ve got a four registered dietitian tours that we’ve executed on this year and the ability for those folks to actually meet a farmer, spend time on the farm, understand how the pigs are raised, and then really talk about pork as a food has been a fantastic success story on our connection there.
Don Wick: 09:55 There’s nothing like that farmer telling that story and we’re seeing that being done really, whether it’s in social media or, or out on Operation Main Street, the producers front and center.
Bill Even: 10:06 Absolutely. You know, it’s, it’s one thing if there’s opportunities for me to speak, uh, as, as, uh, the leader of the Pork Checkoff. But fundamentally the farmers are the ones that are the leaders and having those folks, whether they’re talking to the media folks like you Don, or whether they’re talking to Dietitians, whether they’re talking to influencers in the, in the market, they’re always very credible spokespeople.
Don Wick: 10:29 Anything we’re missing, we should focus on?
Bill Even: 10:31 Well additionally, Don, I’d talk a little bit, uh, also on research, uh, the Pork Checkoff, working with USDA, we just secured a $1,000,000 matching grant to really talk about long run pig livability. And so we’re very proud that the Pork Checkoff dollars are come forth on that. The USDA came up and matched us. So we’ve got a $2,000,000 program now leveraging your Checkoff dollars wisely to help understand how we continue to improve the health and welfare of our pigs.
Don Wick: 11:00 So what in particular is the driver with that research? What are you looking to achieve?
Bill Even: 11:05 So when you look at how we manage the health and welfare of our pigs, the Pork Checkoff spends over $6 million dollars a year financing research in partnership with a lot of our land grant universities. And when we stepped back and looked at how are we going to tell the sustainability story, how do we need to make sure that we’re continuously improving how we raise our pigs? Uh, taking a look at the health and welfare of the pigs is important. And so we sat down with the USDA and crafted a grant proposal that they ended up matching, and we’re going to kick that research off here, this fall.
Don Wick: 11:40 Always exciting times a maneuver through this marketplace, I guess, and onward and upward.
Bill Even: 11:45 Amen.
Don Wick: 11:46 Again, thanks to Bill Even CEO of the National Pork Board, And thank you for listening to this edition of Pork Pod. For more information on this topic or the Pork Checkoff itself, visit pork.org.