WASHINGTON, Feb. 12, 2014 - A top executive at Smithfield Foods told an audience of young farmers and ranchers this weekend that they must keep the attitudes of their customers front and center when making decisions about their operations.
“The consumer is king,” Robert “Bo” Manly, the executive vice president of the biggest U.S. pork processor, said in a presentation at the American Farm Bureau Federation’s (AFBF) Young Farmers and Ranchers (YF&R) 2014 Conference in Virginia Beach, Virginia.
“You in this audience must embrace that notion or, frankly, get out of agriculture,” said Manly, who is also CEO of Murphy Brown LLC, Smithfield’s swine production subsidiary.
Smithfield, which was bought by Chinese processor Shuanghui in September, is the largest pork producer globally and requires its company-owned U.S. farms (and strongly encourages its 2,000 contract growers) to operate without gestation stalls for pregnant sows — a popular consumer-driven and animal rights issue.
“We will continue to face issues with animal welfare, food safety and antibiotic uses, but the consumer is king. And unfortunately agriculture will continue to be influenced by politics,” he noted. “Your challenge is how to profitably and sustainably increase production” for a global population that is expected to reach 9 billion by 2050, from the present 7.1 billion, he said.
Currently, Manly said “agriculture does a terrible job of trying to represent itself to the public,” adding that industry groups tend to be more reactive to negative news than proactive in sharing their message.
“We don’t do a very good job of getting our good stories out there,” Manly said. He noted that Smithfield aims its messages toward an 18-year-old audience, “because that’s who will be buying our product in the next few years.”
Jake Carter, the newly elected YF&R chairman for 2014, agreed that farmers need to keep customer attitudes paramount. “Now it is more important than ever that young farmers and ranchers connect with consumers,” Carter said in an interview.
A seventh-generation farmer, the 33-year-old Carter runs a dairy farm in Georgia and a retail operation where people can pick their own berries and peaches. He also hosts tours for schools, attracting several thousand visitors a year. This helps him keep in touch with consumer attitudes, in addition to social media, which he said comes naturally to a younger generation of farmers. Being involved in a grassroots organization like AFBF also helps, and it can build optimism for young people in the industry.
Carter pointed to this year’s record attendance of more than 1,000 people at the YF&R conference as proof that “we’re building momentum with young farmers. People are seeing there are opportunities in agriculture…and they’re wanting to better themselves,” he said.
Another speaker at the conference, David Kohl, dean of Farm Credit University and professor emeritus in the Ag Economics Department of Virginia Tech, stressed the need for young farmers to manage their operations for adverse times, keeping close tabs on margins and expenses.
Also, “Have a close relationship with your ag lender,” he said, while noting that farm finances should be able to withstand a 3 percent increase in interest rates.
Kohl told a group assembled in the Virginia Beach Convention Center that to survive in agriculture, they must strive to run above-average operations. “If you’re planning on being average or below average, agriculture is not the place for you,” he said. “We have extraordinary challenges.”
Kohl also stressed the need to watch global developments, specifically China’s behavior in trade negotiations, and its growing demand for U.S. products. Shuanghui’s purchase of Smithfield demonstrates China’s interest in acquiring brand recognition and food safety protocols, he said.
Carter, the YF&R chairman, had some closing advice for this younger generation of farmers:
“Treat your farm like a business,” he said. “We need to realize what the market wants and respond.”
For more information, see www.agri-pulse.com.