This Little Piggy Has A Market Niche
The pork business certainly has its challenges. Hog farmers continually grapple with high feed prices, environmental hiccups and criticism from animal welfare groups.
But some producers are creating a path to profitability by pursuing smaller, more specialized markets.
There's more than one way to sell a pig.
And when the hog market plunged to 8 cents a pound in 1998, Iowa producer Randy Hilleman decided it was time to make a change. Hilleman raises Berkshire pigs, a breed that’s fattier than traditional pigs and costs a little more to raise. Back then, that was hurting him.
“If we took them into Marshalltown, [Iowa] to the big packing plant, we would get docked because they’re too fat,” Hilleman said. “What they pay on is lean, and we like to have some fat on ours.”
So along with another Berkshire producer, he went door-to-door to restaurants. The farmers discovered that not only would customers buy their pork — they’d pay a premium for it.
“It gradually grew and grew ‘til we got more producers and then we got distributors,” Hilleman said. “It was a long haul from being really small to where we are today.”
Today, Hilleman’s farm in State Center, Iowa, is part of Des Moines-based Eden Farms, a collective of 35 hog producers in Iowa and neighboring states that sells about 18,000 hogs a year. They raise only purebred Berkshires on all-vegetarian diets.
“The Berkshire has certain qualities that make it better eating and more enjoyable. And, basically, it has smaller meat fibers and better water-holding capacity and more intramuscular fat. So, the fat is what gives you the flavor,” said Hilleman, who helped form Eden Farms when those early door-to-door sales took off.
Eden Farms’ suppliers limit antibiotic use (none in the 100 days before slaughter) and give the pigs room to move around, usually in hoop houses with access to the outdoors.
Specialty pork like this may be just a tiny fraction of the American pork market, but it is growing. The National Pork Board commissioned a survey to assess interest in niche pork. It found customers buy it less frequently than they buy other natural, local or organic foods, but still more than once a month.
Perhaps the best known player in niche pork is the Niman Ranch network, which sells more than 130,000 hogs per year from more than 400 hog producers in the Midwest. Niman producers commit to not using antibiotics at all, providing deep bedding and pasture to their hogs, and feeding them an all-vegetarian diet.
Iowa State University swine expert Jim McKean said the niche market is even starting to develop a presence overseas. And it can be a good fit for certain producers.
“If they can find a way to make enough money at what they’re doing to support themselves, then they’re very happily doing that (niche production),” McKean said.
Eden Farms markets its meat and negotiates prices largely independent of the commodity price for hogs.
“We market it to where we can keep our producers profitable,” said Nick Jones, general manager of Eden Farms.
Jones said in mid-April that he was paying farmers 85-88 cents per pound for live pigs. Plus, every quarter the farmers get back dividends on Eden’s sales.
Eden’s customers are primarily high-end distributors serving restaurants in Denver, Atlanta, New York, California and Florida, Jones said. But he does some direct sales in the Des Moines area, including to La Quercia, a cured-meat producer in nearby Norwalk, Iowa.
La Quercia owner Herb Eckhouse visits the farms that raise the pigs he ultimately turns into prosciutto, salami and pancetta. He wants the best pork going into his meats and he’s willing to pay farmers accordingly.
“We recognize that it’s not sustainable agriculture if the farmer goes out of business,” Eckhouse said. “And it’s very important to them to make money and they have kids that they want to send to college, just like we do and just like our customers do.”
Eckhouse said he negotiates prices with collectives, such as Eden Farms, or directly with farmers.
“We can hold our prices for an extended period,” he said. “We adjust our prices one to two times a year. If we have a significant price change, we have to translate that through to our customers.”
Thus far, he’s found plenty of customers willing to stick with him. Eckhouse is currently expanding his plant to meet growing demand.
At Eden Farms, Jones expects sales to grow 30 percent over the next year. He said farmers regularly contact him to see about joining the program. But raising Berkshires is not right for everyone.
“We have them visit with a lot of our current producers that have transitioned from regular commodity pigs and other breeds to the Berkshires so they really have a good understanding of what the costs are, and the feed efficiencies are, before they jump in,” Jones said. “Out of the 10 producers that will inquire and are serious about it, I would say five of them will join.”
Though La Querica and some of Eden’s distributors have fairly high-end customers, Eden pork is not exclusive.
“These are the Home Field franks that we sell at Iowa State University,” said Jones, pulling out a package from a freezer in a storeroom at the Eden Farms office. “So that’s the official hot dog for Iowa State.”
Check out the video slideshow to see more about how hogs from Happy Hula Farm in Zearing, Iowa, become La Quercia's prosciutto.