Meat + Poultry - October 2009 - 104

Pork industry
insight
Seaboard CEO tells it like it is
BY JOEL CREWS
jcrews@sosland.com

t a lunch meeting sponsored by
Meat&Poultry this past month,
Rod Brenneman, Seaboard Foods
president and chief executive offi cer, addressed meat-industry suppliers based in the Kansas City area.
Brenneman, who has served as chairman of the American Meat Institute
for the past 11 months, discussed the
progress made on his initiatives as a
leader with the trade group followed
by some sobering remarks about the
challenges facing the pork industry.
Throughout his tenure as chairman, Brenneman said there have
been challenges facing the meat industry, some of them as a result of the
Obama administration's position on
issues such as reforming the nation's
ethanol policy and corn production
mandates. As a supporter of alternative fuel initiatives, Obama's support

A

S i n c e 1907

of policies that may raise the current
required ethanol-to-gasoline blend
to 15 percent nationwide, could lead
to another food vs. fuel crisis, which
led to widespread fi nancial fallout
throughout the meat and poultry industry over the past 18 months.
Since last November's presidential
election, Brenneman said, "It's almost
been a continual assault on our industry in Washington."
Brenneman also addressed some
of the challenges to the meat industry, including the worldwide economic downturn, the H1N1 outbreak, the
over-supply of meat on the market
and re-establishing trade with export
markets.
Contributing to the excess supply of pork in the market is the improved production of hogs over the
past year. "Productivity is back," said

Brenneman, thanks, in part, to the
development of effective vaccines and
improved feed. "Unfortunately during
a time when we're dealing with some
of the worst prices, we also have an
over-abundance of supply," he added.
"We need to right-size the industry," as is evidenced by companies like Smithfield
and Tyson cutting
swine herds by 5
percent or more,
he said. "I personally think we need
to see a 10-percent
liquidation," said
Brenneman, to
bolster live prices
to the point (about
Brenneman
$45) that producers are no longer losing money. And
even at a 10 percent decrease, "that's
not getting to wild profitability for
producers; that's just getting to what
I think is a good, sustainable level for
the long term."
Increasing international trade, including pork exports to China, was
made more challenging by this year's
H1N1 outbreak, which has served as a
convenient reason for some countries
to keep their borders closed. "H1N1
served as an excuse, albeit an invalid
excuse, for some," he said. Meanwhile,

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