The Berkshire Niche Market

The Berkshire Niche Market
~
“What do I need to know?”
Larry K. McMullen
ISU Extension Swine Field Specialist
Jones County Extension Office
Anamosa, Iowa
(319) 462-2791
[email protected]
BERKSHIRE SWINE PRODUCTION
AND MARKETING
“Berkshire Niche Market Opportunity Guidelines”
(PN03-05B)
Prepared for:
Pork Niche Market Working Group - (PNMWG)
August 2006
“Supported by the Value Chain Partnerships for a
Sustainable Agriculture (VCPSA) and the Pork Niche
Market Working Group (PNMWG) using funds from
the W.K. Kellogg Foundation”
Prepared by:
Larry McMullen, ISU Extension Swine Field Specialist
Disclaimer: While every effort has been made to ensure the accuracy of the information supplied within the Berkshire Swine
Production and Marketing report, decision aids, and power point program, the Value Chain Partnerships for a Sustainable
Agriculture (VCPSA), the Pork Niche Market Working Group (PNMWG), the W.K. Kellogg Foundation, Iowa State Univeristy
Extension and/or the author assumes no liability for the accuracy of the information contained within or for the consequences
of any actions taken on the basis of the information provided.
What is a Niche Market ?
Niche Market
• Niche Market – A small distinct market that
may provide a higher price for a product
that meets a specific customer need.
• Each niche market has a maximum size.
• Problem with niche marketing is
“copycats” mislabeling the product to gain
short term premiums.
History and Background of the
Berkshire Niche Market
• American Berkshire Association founded
in 1875 – Oldest purebred breed
• The Berkshire breed has always been
noted for excellent carcass quality
• Berkshire Gold Program (1994)
• Royal Berkshire (1998)
• 100 % Berkshire (1998)
What is the History and
Background of the Berkshire Niche
Market ?
What are the Berkshire
Production Characteristics ?
Berkshire
Production Characteristics
Berkshire
Production Characteristics
• Hardy and adaptable to both outdoor and
confinement production.
• Sows have an excellent disposition and
are quite docile.
• Boars – excellent libido and semen
quality.
• Boars display an excellent disposition for
handling.
• Expected Progeny Differences (EPD’s) for
Berkshire sires are available from the
American Berkshire Association.
Where to Locate Berkshire
Breeding Stock ?
•
•
•
•
•
•
Purebred = limited heterois
Litter Size = (farrow ~ 9.0 – wean ~ 7.5)
Pigs per Sow per Year = (~ 10 – 15)
ADG = (birth to 250 lb. market, ~1.35)
Days to 250 lb. = (~ 180 – 195)
FE = (5-10% poorer than x-bred, ~ 325 -350
lbs./cwt.)
• LMA @ 250 = (~ 5.75 – 6.00 sq. in.)
• BF @ 250 = (~ 0.8 - 1.2)
• Production constraints may require a 30-40 %
price premium over commodity animals.
Berkshire Breeding Stock
• ABA – Breeders Directory
– Good availability and excellent Berkshire
breeders in Iowa
– Approximately 300 breeders in USA
• May be limited volume availability of gilts
– Most breeders have small herd size
• Good Berkshire representation in boar
studs
• Cost = (Boars ~ $500 to $750 / Gilts ~
$225 to $275)
What are the Pork Quality Traits of
the Berkshire Breed ?
Typical Berkshire Pork Quality
Scores
•
•
•
•
High muscle color scores (3 – 5)
Desirable marbling scores (2 - 4)
High ultimate pH values – (5.8 +)
Consistently yields carcasses that have:
– Low cooking loss
– Low reflectance scores (Minolta)
– High intramuscular fat (IMF) scores
– Excellent tenderness and juicy scores
Berkshire Pork Rankings for Sensory Quality
(NBS 1990 – 1999 progeny test)
Attribute
Benefit
High Ultimate pH
Score
Relates to low cooking First in 6 of 7
loss, better water measures
holding capacity, high
degree of tenderness
Berkshire Rank
Loin Firmness / Drip
Loss
Improved processing
quality, tenderness
First in 4 of 4
measures
Meat Color
Consumers
consistently prefer
darker pork
First in 5 of 7
measures
Cooked Loin Quality
High scores for
intramuscular fat
percent, tenderness
and juiciness all
predict better
consumer satisfaction
First in 4 of 5
measures
Berkshire Pork
What is the 100% Pure Berkshire
Pork Program
• Berkshire pork is highly palatable to the
consumer due to flavor characteristics.
• Excellent pork dining experience (taste,
tenderness, and juiciness)
• Growing preference by chefs for Berkshire
pork on their menu.
• Have you had your serving of Berkshire
Pork today ?
100 % Berkshire Program Seal
(2004)
100 % Pure Berkshire
• 100% Pure Berkshire Pork Program is a
marketing program
• ABA makes three claims in the 100% Pure
Berkshire Pork program:
– Pork is from purebred Berkshire market animals that
are progeny of pedigreed parents.
– Pork from a given day’s processing at licensed
packers can be traced to the groups of market
animals from farms where they were raised.
– Operators of all certified herds follow the production
guidelines established in the National Pork Board’s
PQA Level III program.
Certification for 100% Berkshire
Program
• ABA certification program is an auditing program
to ensure the integrity of the 100% Berkshire
program.
• Accomplished by the registration and
certification of all pigs through the American
Berkshire Association.
•
ABA 100% seal certifies that the
Berkshire pork is genuine, fully
registered and with unbroken
pure genetic heritage, traceable to its family farm
origin.
100 % Pure Berkshire
• Two Methods to produce 100 % Pure
Berkshires
– Maintain a purebred registered herd
– or
– Develop a Certified Commercial Herd
• Producer has the option to be a registered
herd or a certified herd but not both
Certification for 100% Berkshire
Program
• Some producer groups are making the claim of
100% purebred Berkshires with DNA testing.
• Problem with DNA test –
Test does not detect the difference between pure
Berkshires and Berkshire crossbreds
• Refer to the scientific review of the DNA test for
Berkshire parentage by Dr. Rodger Johnson,
University of Nebraska for a complete discussion
of DNA testing. (available through the ABA)
• Only non-mutant HAL 1843 and non-mutant
Rendement Napole gene Berkshire sires can be
used.
100 % Pure Berkshire
Registered Herd
• Senior Membership is $10.00 and an annual
maintenance fee of $20.00/year.
• Junior Membership – No charge for those under
18 years of age.
• Receive an ABA herdmark (3-4 letters or
numbers) designation - $5.00 Fee
• Follow ABA pig registration guidelines
– Each litter and individual pig must be earnotched
– Record litter and all eligible pigs / $12 under 90 days
of age (1-149 litters), $10 for 150 or more litters, and
$50 over 90 days
100 % Pure Berkshire
Certified Commercial Herd
• Criteria for a Certified Commercial Herd
– All hogs pure Berkshire
– Sows and boars registered with the ABA
– All Berkshire breeding animals must be stress
negative
– Herd must be PQA Level III
– All progeny will be ear notched within 7 days but
pigs will not have to recorded with ABA.
– Only slaughter pigs may be produced. Gilts and
boars are not to be retained in herd or sold for
breeding stock.
100 % Pure Berkshire
Feeder Pig Finisher
• Feeder Pig Finisher
– Receives pigs from either a registered or
certified sow herd
– Fee is $1.00 / head at market to ABA
100 % Pure Berkshire
Certified Herd
• Criteria for a Certified Berkshire Herd
– Hogs are to be marketed only to an entity under
contract with the ABA on the 100% Pure Berkshire
Program. (ex: SIG)
– Pigs sold and transferred into a certified herd must
have a mandatory ABA ear tag ($1.00 tag cost).
Tag number is recorded on the transferred
pedigree.
– Fee for a certified herd is $12.00/sow/year to the
ABA.
100 % Pure Berkshire
Certified Packer
• Certified Packer
– Sign licensing agreement
– Follow the ABA guidelines for handling incoming
animals and outgoing pork
• Current licensed packers
– SIG International, Boyden, Iowa (~ 1400 head /
month)
– Berkshire Meats, Inc., Clarks Grove, Minnesota
(~1000 head / month)
• Packer fee for license to ABA
– Export market - $1.25 per head
– Domestic market - $5.00 per head
100 % Pure Berkshire
Licensed ABA Certified
“ABA” “BMP” What is the
Relationship ?
• Certified Registered Herds
– ~ 20 herds
• Certified Commercial Herds
– ~ 15 herds
• Certified Feeder Pig Producers
– ~ 4 producers (finishing pigs)
• Certified Packers
– Two (2) Packers
• SIG International, Iowa and Berkshire Meats, Minnesota
ABA and BMP Relationship
• American Berkshire Association (ABA)
• Berkshire Meat Products, LLC (BMP)
• BMP is a wholly owned subsidiary of the
ABA
• BMP purpose is to provide marketing
support for Berkshire pork producers and
their customers.
• BMP contracts with third parties for
marketing and sales services.
“ABA” “BMP” What is the
Relationship ?
Who are the ABA Certified
Producer Marketing Groups ?
Who are the Non-Certified
Producer Marketing Groups ?
ABA Certified Marketing Groups
• Dr. Pete Hoffman Group, Iowa (7 farms = 200300 hd. / mo.)
• NW Missouri Berk Breeders, Sager, et al (6
farms)
• Beckman Farm, Minnesota (10 farms = 600 800 hd. / mo.)
• Berkshire Meats, Inc. (BMI), Dr. Rodney
Goodwin Group, Iowa/Minnesota (6 farms = ~
800 hd. / mo.)
• Oak Hill Farm, Mike and Dan Hodges,
Nebraska/Kansas (8 farms = ~ 300 hd. / mo.)
Non-Certified ABA Berkshire
Marketing Groups
• Eden Natural ( Kelly Biensen),State Center,
Iowa (800 – 1000 hd. / mo. – 20 farms)
• Berkridge (Pro Pork & Sioux Preme Packing),
Sioux Center, Iowa ( ~ 2400 hd. / mo. – 18
farms)
• The Seaforth Company, LLC, Ken Kehrli Group,
Winthrop, Iowa (Network of numerous
independent family farms)
• Six Point Berkshire, Cottonwood, Minnesota
(600 – 800 hd. / mo. – 35 farms)
• Snake River, Boise, Idaho (Receives product
from Midwest Growers, 1400 – 2100 hd. / mo.)
Farm to Consumer Direct
Marketing
What Must Be Considered When
Marketing Berkshire Niche Pork ?
• Several independent producers are using
50 - 100% Berkshires to market directly to
the consumer.
• Check the National Pork Board – Niche
Pork web site
Berkshire Marketing
• Primarily export to Japan – New Japanese maximum
residue level standards implemented 5/29/06 – Check
National Pork Board Website for more information:
www.pork.org/Producers/JapanMRLContinued.aspx
• ZERO tolerance for drug residues
• Black hair and mange problems at plant (trim of carcass)
• Maintain excellent health – no condemned carcasses
• Practice animal handling and trucking as recommended
by Trucker Quality Assurance (TQA)
• Follow Pork Quality Assurance Guidelines (PQA)
• Because extra premiums are paid for 100 % Berkshire
hogs – extra management and care should be practiced
to insure a quality product to the packer and consumer.
What Market Premiums Can I
Expect From a Berkshire Niche
Market ?
Market Premiums
What are Economics of Producing
Berkshire Niche Pork ?
• Approximately - $10 / cwt live base
premiums are available
• Premiums and incentives paid by the
various marketing groups will vary. Check
with marketing group for specific
specifications.
Berkshire Economics
Berkshire Decision Aids
Berkshire Swine Production and Marketing
Berkshire Swine Production and Marketing
Decision Aid - Farrow to Finish
/ Input Cell
• To be involved in the Berkshire Niche
Market a high level of management skills
will be needed.
• Decision Aids are available on an Excel
Spreadsheet to make a quick analysis of
the Berkshire Niche to Commodity
Production.
Decision Aid - Finishing Pigs
/ Calculated Cell
/ Input Cell
PART I: Production Information
Berkshire
Com m odity
Number of Sows
100
Number of Boars
3.00%
1.90
190
1.90
190
Pigs Born Alive per Litter
8.25
9.75
Pre-Weaning Death Loss
10.00%
Pigs Weaned Per Litter
10.00%
7.43
Number of Finishing Pigs (Weaned)
Death Loss of Finishing Pigs
8.78
1411
1667
5.00%
5.00%
1340
1584
260
270
Total Head Marketed
Market Weight, lb.
Days to Market
190
Average Daily Gain (Birth to 250 lb.), lb./day
Be rkshire
5
3.00%
185
1.37
1.46
5.00
Days in Gestation/ year
Lactation / ave daily consumption. lb.
5.00
315
315
14.00
14.00
Days in Lactation / year
50
Boar - Ave daily consumption. lb.
242,027
242,027
Feed Consumption / Finishing Pigs, lb.
1,306,707
1,353,286
Total Feed Consumption, lb.
1,548,734
1,595,313
Feed Efficiency / whole herd
4.44
Feed Cost per lb of diet
Total Feed Cost
Feed Cost / cwt
Non-Feed Cost / Cwt
Niche Market Cost / Pig
Total Niche Market Cost
Total Non-Feed Costs
Total Cost of Feeder Pigs Placed on Feed
3.73
3.75
3.16
PART II: Cost of Production Expenses
Berkshire
Feed Cost per lb of diet
Com m odity
$0.06
Total Feed Cost
$92,924.04
Feed Cost / cwt
$26.67
Non-Feed Cost / Cwt
$0.06
$22.38
$17.00
$13.00
Total Niche Market Cost
Total Cost of Production
$0.00
$60,796.27
$74,613.61
$155,020.31
$170,332.37
Total Cost of Production / Cwt
Total Cost / Sow
$44.49
$39.83
$1,550.20
$1,703.32
Total Cost / Pig
$115.67
Yield Per Cent
Niche Premium/ Cwt Live
Niche Premium / Total
Total returns
Total returns/ Sow
Total returns/ Pig Marketed
Niche Premium/ Cwt Live
Niche Premium / Total
Com m odity
$43.00
$45.00
$0.00
$2.00
74.00%
74.00%
$0.00
$1.48
$10.00
$34,845.53
$184,681.28
$1,846.81
$137.80
$0.00
$0.00
$198,771.55
$1,987.72
$125.50
Total returns
Total returns/ Pig Marketed
296
Be rkshire
$0.06
$5,001.75
Com m odity
$0.06
$4,633.20
$20.25
$17.00
$1.00
$100.00
$4,309.50
$3,400.00
$17.73
$17.00
$0.00
$0.00
$4,558.13
$3,400.00
$12,811.25
$51.87
$134.86
Berkshire
$184,681.28
$155,020.31
TOTAL PROFIT
$29,660.98
$28,439.18
$296.61
$22.13
$284.39
$17.96
$43.00
$0.00
74.00%
$0.00
$12,591.33
$48.20
$132.54
Com m odity
$45.00
$5.00
74.00%
$3.70
$10.00
$2,470.00
$0.00
$0.00
$13,091.00
$137.80
$12,722.88
$133.93
Be rkshire
$13,091.00
$12,811.25
Com m odity
$12,722.88
$12,591.33
$279.75
$131.55
$2.94
$1.38
PART IV: Estimated Net Returns
Total Receipts
Total Expenses
PART IV: Estimated Net Returns
Total Receipts
Total Expenses
Profit / Sow
Profit / Pig
4.40
77,220
813
338
Be rkshire
$107.54
Berkshire
Total Carcass Premium / Cwt Live
180
1.46
4.50
83,363
878
PART III: Production Receipts
Base Price / Cwt Live
Carcass Premium / cwt. Carcass wt
Yield Per Cent
Total Carcass Premium / Cwt Live
PART III: Production Receipts
Base Price / Cwt Live
Carcass Premium / cwt. of Carcass wt
190
1.31
$0.00
$1,300.00
Total Non-Feed Costs
Total Cost of Production
Total Cost of Production / Cwt
Total Cost / Pig Marketed
$95,718.76
$17.00
Niche Market Cost / Sow
$283.33
5.00%
95
275
4.50
Feed Consumption / Breeding Herd, lb.
Feed Efficiency / Finishing Pigs
Com m odity
100
12
$34.00
$283.33
5.00%
95
260
PART II: Cost of Production Expenses
6.00
5.00
100
12
$34.00
Cost per CWT of Pigs Placed on Feed - $/Cwt.
Death Loss - %
Total Head Marketed
Market Weight - lbs
Feed Efficiency, lbs.
50
6.00
Finishing Pigs / Ave. Feed Consumption from Birth to Market, lb.
Number of Finishing Pigs Placed on Feed
Weight of Pigs Placed on Feed - lbs
Cost per head of Pigs Placed on Feed - $/head
Days to Market
Average Daily Gain - lbs/day
Fe e d consum ption
Finishing Pigs / Ave. Feed Consumption from Placement to Mkt., lbs.
Total Feed Consumption, lbs.
Feed Consumption / Pig, lbs.
Feed consum ption
Gestation/ lbs per day
/ Calculated Cell
PART I: Production Information
100
5
Breeding Herd Death Loss
Littters / Year / Sow
Number of Litters / Year
TOTAL PROFIT
Com m odity
$198,771.55
$170,332.37
Profit / Pig Ma rke te d
Versi on 3.01 FP 07.21.06 - “Supported by the Val ue Chai n P artnershi ps for a Sustai nabl e Agri cul ture (VCP SA) and the
P ork Ni che M arket Worki ng Group (P NM WG) usi ng funds from the W.K. Kel l ogg Foundati on”
Devel oped and P repared by:
Ve rs ion 2 .0 0 FF 0 7 .2 1 .0 6 - “ Supporte d by the Va lue Cha in Pa rtne rs hips for a Sus ta ina ble Agric ulture (VCPSA) a nd the Pork
Nic he M a rk e t Work ing Group (PNM WG) us ing funds from the W.K. Ke llogg Founda tion”
Larry K. M cM ul l en, Iowa State Uni versi ty Extensi on, Swi ne Fi el d Speci al i st, 605 East M ai n, Anam osa, Iowa 52205
De v e lope d a nd Pre pa re d by :
5/19/2006
La rry K. M c M ulle n, Iowa Sta te Univ e rsity Exte nsion, Swine Fie ld Spe c ia list, 6 0 5 Ea st M a in, Ana m osa , Iowa 5 2 2 0 5
5 /1 9 /2 0 0 6
Disclaimer:
While
report,
decision
Working
Group
of
the
every
aids,
effort
and
(PNMWG),
information
the
contained
has
power
W.K.
within
been
made
point
prpgram,
Kellogg
or
for
to
ensure
the
Foundation,
the
Value
Iowa
consequences
the
accuracy
Chain
State
of
of
the
Partnerships
University
any
action
information
for
Extension
taken
a
supplied
Sustainable
and/
on
the
or
within
Agriculture
the
basis
author
of
the
the
Berkshire
(VCPSA),
assumes
the
no
information
Production
Pork
liability
provided.
Niche
for
and
Marketing
Market
the
accuracy
Disclaimer: While every effort has been made to ensure the accuracy of the information supplied within the Berkshire P roduction and Marketing
report, decision aids, and power point prpgram, the Value Chain Partnerships for a Sustainable Agriculture (VCPSA), the Pork Niche Market
Working Group (PNMWG), the W.K. Kellogg Foundation, Iowa State University Extension and/ or the author assumes no lia
a bility for the accuracy
of the information contained within or for the consequences of any action taken on the basis of the information provide
e d.
Where Can I Find Berkshire
Information and Educational
Resources ?
Resource - Organizations
•
•
•
•
American Berkshire Association
Berkshire Meat Products
National Pork Board
Pork Niche Market Working Group
Resources – Magazines & Manuals
Resource – Scientific Publications
• ‘Breeders Digest’ – Official publication of
the Berkshire, Chester White, Poland
China, and Spot breeds.
• 100% Pure Berkshire Pork - Program
manual
• 100% Pure Berkshire Pork – Producer
Training Manual
• American Berkshire Association – Member
Handbook
• “DNA Tests to Certify Berkshire Parentage
– Report to the American Berkshire
Association” Dr. Rodger Johnson,
University of Nebraska, Lincoln, Nebraska
September 4, 2001
Resource - Web Sites
• American Berkshire Association www.americanberkshire.com
• Berkshire Meat Products, LLC www.berkshiremeats.com
• Agricultural Marketing Resource Center
www.agmrc.org/commodity/livestock/pork
• National Pork Board Niche Market www.nichepork.org
• Eden Natural www.betterpork.com
• Berkridge www.berkridge.com
• Six Point Berkshire www.sixpointberkshire.com
• Snake River Farms– www.snakeriverfarms.com
• Pork Niche Market Working Group www.pnmwg.org
• USDA / AMS - http://www.ams.usda.gov/
• Heritage Foods USA http://www.heritagefoodsusa.com/
• NPB – Japanese Drug Residue Levels
www.pork.org/producers/JapanMRL.aspx
Where do I find the “Berkshire
Swine Production and Marketing
Material” by Larry McMullen
Pork Niche Market Working Group (PNMWG)
www.pnmwg.org
American Berkshire Association (ABA)
www.americanberkshire.com
National Pork Board – Niche Market (NPB)
www.nichepork.org
Iowa Pork Industry Center (IPIC)
www.ipic.iastate.edu
Berkshire Material Developed by
Larry McMullen
• Project Document Berkshire Swine Production and Marketing
“Berkshire Niche Market Opportunity Guidelines”
• Decision Aid Farrow – Finish Excel Spreadsheet
• Decision Aid Feeder Pig-Finisher Excel Spreadsheet
• Power Point Presentation –
“Berkshire Swine Production and Marketing”
Is there a Berkshire in your future ?
Questions or Comments
Thank you !