Meat Packing Journal, May-Jun 2018, iss 3, vol 5

Meat global

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March~April 2018 Volume 5, issue 3 ISSN 2054-4685

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52 | Indonesia – potenital but laws hamper growth

48 | study: hard to keep a good person on the farm

32 | The pork in spain gains growth worldwide

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le ad e r

Because we can

D

uring one period of my life – about 25-years-ago to the day – I was broke with a whopping 39 cents to my name. I was going through a messy divorce, a messy life, a messy job, and it was all about 99% my own fault.

After spending a few nights

in a sleeping bag on an office floor and borrowing money for food, a friend took pity on me and told me he had a couch I could crash on. The first night Jim listened to me moan and groan about how unfair life was, it wasn’t right, and all the other stuff people say when they’re in denial about their own mistakes.

Jim finally gave me a look of absolute disgust. “Hey

Who indeed. Not Safeway.

Although as I mentioned it was 25-years-ago, it’s something that I think about now and again, and each

man, you got a roof over your head? Got food in your

time I get just as angry. When I lived there, I knew I was

belly? Everything else in life is gravy; there’s a lot of

the right color, the right sex, and even had the right

people out there with a whole lot less.”

education – my time in that house was temporary, I’d be

And he was right. Jim himself was living pretty-close

soon back on my feet. Even Jim and his son were able

to the edge. His drug-addict wife left him with their young

to make the break and move away. But everyone else in

son and took off to parts unknown. He was living in the

the neighborhood? Are they still being penalized by the

San Francisco Bay Area and even back then rents were far

supermarkets for the crime of being poor?

from being cheap. Jim and his son were renting a couple

I bring this up because the European Commission just

of rooms in an old Victorian that had been subdivided a

revealed its New Deal for consumers, aimed at making

half-dozen different ways. It was in one of the poorer parts

sure all Europeans fully benefit from their rights. The

of Alameda, and a very rough part of Oakland was just a

proposed amendment makes it explicit that businesses

short walk away. With it being all I could afford, I moved

are guilty of a misleading commercial practice if they

into one of the rooms myself after a couple of nights on

market a product as being identical across several

the couch.

member states if those products have “significantly

The area was mostly Hispanic – on both sides of the

different composition or characteristics causing or likely

bridge – and the majority relied on public transportation.

to cause that average consumer to take a transactional

In the evening, I’d see these beat, tired-looking women

decision that he would not have taken otherwise.”

getting off the nearby BART train or buses; you had to wonder what time their day started?

There was a run-down Safeway supermarket nearby that had the worse quality fruit, vegetables, and meat I’ve

This rather confusing sentence basically means this: Manufacturers better stop selling poorer quality foods under the same branded name across member states, in particular to Eastern European consumers.

ever seen. About two miles away in a much better part of

If I sell in Germany Velo’s Prime Hotdogs make with

Alameda was another Safeway. Its produce was amazing,

100% prime cuts of beef and I’m also selling under the

kept crisp with misters that went on every couple of

Velo’s Prime Hotdog label in Poland, the dogs better be

minutes. Unlike the people in my neighborhood, I had

the same, not made instead with 100% beef lips. Needless

a car; I could be a bit more selective where I shopped. I

to say, manufacturers are not happy about this proposed

chose the other Safeway for anything more than milk.

rule.

I assumed that the low-quality produce and meat were

Why have these manufacturers been doing this,

being sold at discount at my local Safeway. I checked. It

enough so that the EU is having to step in? Because they

was all being sold at exactly the same price.

thought they could get away with it. The only difference

I asked a kid working the produce at my Safeway why

between what the EU is trying to tackle and what I

the poor quality? He looked around at all the Mexicans

witnessed at Safeway is this: at least the EU cares about

doing their dinnertime shopping. “Because we can. Who

these people.

gives a shit about these people?”

meatpacking.info

Velo Mitrovich, Editor

May~June 2018

5

co ntac t s

“The quick shredding of chicken, pork, or beef products has made the prep time and the production time half of what it was with our other machine.”

contacts Velo Mitrovich Editor velo@rebymedia.com +44 (0)1442 780 591 Jim Robertson Head of sales jim@rebymedia.com +44 (0)1442 780 593 Josh Henderson Sales executive josh@rebymedia.com +44 (0)1442 780 594 Jon Young Publisher jon@rebymedia.com Reby Media 42 Crouchfield, Hemel Hempstead, Herts, HP1 1PA, UK

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SUBscriptions Meat Packing Journal is a bimonthly magazine mailed every January, March, May, July, September and November.

Subscriptions can be purchased for six or 12 issues. Prices for single issue subscriptions or back issues can be obtained by emailing: subscribe@meatpacking.info

International One year: $749 The content of Meat Packing Journal is subject to copyright.

However, if you would like to obtain copies of an article for marketing purposes high-quality reprints can be supplied to your specification. Please contact the advertising team for full details of this service. Meat Packing Journal is printed at Stephens & George, Merthyr Tydfil, UK.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system, without the express prior written consent of the publisher. Meat Packing Journal ISSN 2054-4677 is published bimonthly by Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Subscription records are maintained at Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Meat Packing Journal and its Editorial Board accept no responsibility for the accuracy of statements or opinion given within the Journal that is not the expressly designated opinion of the Journal or its Editorial Board. Those opinions expressed in areas other than editorial comment may not be taken as being the opinion of the Journal or its staff, and the aforementioned accept no responsibility or liability for actions that arise therefrom.

FTIINC.ORG/SHREDDERS 309.774.4275 6

May~June 2018

Meat Packing Journal

co nte nt s

contents 52

32 26

18

75

COVER: the gmo battle 18 - While scientists are left scratching their heads and wondering why; consumers flat out reject GMO and everything to do with it. However, there is something similiar which just might go down better

USA/China trade war heats up 9 - There seems to be no end in sight as tit-fortat war continues. So far, the USA is losing

world pork production on rise 40 - This year is looking good for world pork production and consumption. Just don't mention trade war

home delivery company's boost 9 - What is old hat in Europe is getting a massive injection of cash to get it rolling

Good planing means everything 42 - Do your customers demand you turn on a dime? Plan your pork processing and do it

TTP again?

10 - With much fanfare Trump pulled out of the TPP. Now he wants back in; does anyone else?

indonesia regs hurt meat 52 - Indonesia is a challenge for any investor – even its President agrees. It is still worth a look

'why do what you do?'

16 - Marketing columnist Elliot Begoun talks about the life being an entrepreneur

R22 confusion 65 - The regulations are out there, then why too is R22? Can you still use it?

US lamb fighting back 26 - On the ropes and fading fast, US Lamb Board comes up with a new fight plan

greek processor goes large 72 - When you're fighting cheap imports, it's time to upgrade your freezing line

Forget the ham 32 -There is more to Spain than ham; it's taken the lead in EU production of fresh pork

meatpacking.info

Back page interview 75 - Can Belgium sell the idea that it's more than the land of beer and chocolate?

May~June 2018

7

n e ws

Trade war escalates I

n a story that continues to move at a pace almost impossible to report on, the one thing for certain is the

“Over the past nine months, interest in US beef has steadily gained momentum in China and our customer

trade war between the USA and China is not going away.

base has grown. But if an additional import tariff is

US President Donald Trump has announced that he is

imposed on US beef, these constructive business

considering imposing tariffs on an additional $100 billion

relationships, and opportunities for further growth, will

in imports from China – tripling the amount on proposed

be put at risk. USMEF is hopeful that this trade dispute

tariffs of $50 billion in goods.

can be resolved without China introducing additional

In a tit-for-tat escalation, China has already shown it will respond in kind and match the USA in amount.

For the US agriculture industry, which as a whole

obstacles for US beef.”

In the second half of 2017, following the market reopening, U.S. beef exports to China totaled 3,020

supported Trump, this could be a hard kick in the crotch.

metric tons valued at $31 million. In January 2018, exports

Soybeans and other feed grains will take a big hit, along

reached the highest monthly volume to date at 819 MT,

with US pork and beef. Other US crops include fruit,

valued at $7.5 million.

such as apples, oranges and nuts, and products such

According to Successful Farming, the impacts look

as Californian wine. China is the USA largest buyer of

different from the Chinese side vs. the US side of the

soybeans and the industry has already see a $1.7 billion

trade dispute, stating that for the Chinese, tariffs on US

decrease in crop value, according to the American

pork appear to be a good strategic decision. Not only will

Soybean Association.

the tariffs hit key US Trump-supporting states, it will also

US pork producers Smithfield Foods, the world’s largest pork producer – which ironically is owned by China’s WH Group – and Tyson are already feeling the pain of a 25% tariff on all pork products, which is actually

help drive China’s local production.

Already China produces 97% of its own pork; the three percent additional can come from the EU or Russia.

No one should forget, too, what happened to the

around 50% once additional taxes are figured in. Last year

Russian pork industry after sanctions were imposed (see

China imported $1.1 billion in US pork products.

MPJ Sep and Nov 2018). While those who exported pork

In a statement from the US Meat Export Federation, the organization said: “China is a promising market for US beef, and, since the June 2017 reopening, the U.S.

to Russia suffered, the local industry has thrived and continues to grow.

With feed prices up in the USA this year and the

industry has made an exceptional effort to provide

chance that US pork will lose out if Trump goes ahead

customers with high-quality beef at an affordable price.

with his promise to “shake-up” the North American Free

This is not an easy task, due to our 13-year absence from

Trade Agreement, this could be a bad year for American

the market and China’s beef import requirements.

pork producers and exporters.

Home delivery company gets big bucks boost

A

crowded parking lots.

What producers, however, need to get their heads around is the new style of marketing, since impulse-

US-based grocery delivery company is closing in on

buying is oftentimes lower with online shoppers. Store

a $150 million deal, according to Axios. Instacart’s

samples, product demonstrations, and other means

new funding is coming from existing investors such as

of drawing in shoppers once they are already in the

Coatue Management.

supermarket become naught.

While in Europe supermarket home delivery has been

While in Europe, supermarket chains themselves

around for over a decade, it has been slow to catch on in

have their own delivery trucks and drivers – delivering

the USA. Part of the stigma against it is consumers being

groceries often at a loss – US grocery delivery companies

unable to personally select meats, fruits, and vegetables.

are standalones.

However, once customers discover the time saving

Instacart does deliveries for Kroger, Albertsons,

element of grocery shopping online, it is hard going

Costco, and Publix. According to Axios, negotiations are

back to the concrete supermarket, with its long lines and

ongoing between Instacart and Walmart.

meatpacking.info

May~June 2018

9

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Kosher start-up to deliver door to door

Z

ephyr Foods, an Arkansas based start-up, has

beef that is pasture-raised on family farms in Idaho and

announced it has closed its seed-funding round.

slaughtered according to kosher methods. Those inside

The company raised more than $1.5 million from private

and outside of the Jewish faith know that kosher also

investors to expand product development and accelerate

means the animal itself was supremely healthy, which is a

its direct-to-consumer initiative.

direct result of how it was raised and nourished.

The company is set to tap into the USA’s massive

“We’re committed to bringing the best products to

kosher food market by offering Black Angus to mail order

market, and that goes beyond a great tasting product

customers later this year. In the USA, the kosher food

with a great looking package. Today’s consumer cares

market is valued at over 17 billion dollars with many more

about what they eat. They want to know their protein

non-Jews than Jews buying kosher products due to what

came from a source produced in the most natural and

they see as higher standards.

humane way, and that’s what we bring to the table. We’re

Most mainstream grocery stores sell kosher certified

grateful our investors see the vision and understand the

products, but not fresh kosher beef. Zephyr Foods will

consumer need as clearly as we do,” says Kevin Potter,

make their products available to a wider audience across

chief customer officer and co-founder of Zephyr Foods.

the country with their Glatt Kosher (a type of certification)

Turley tells MPJ that the beef will be processed and

products marketed exclusively under the company’s

ship from Idaho via traditional freight direct to distributor

Barada Ranch brand. Additional, non-kosher premium

or via someone like DOT. “Our first customers are retail/

cuts of beef are sold under the company’s Zephyr Meats

grocery and foodservice distributors,” he says. “We are

label in the US.

producing in both subprimal form and individual cuts.

Zephyr Foods was launched in 2017 by three co-

“Subprimals are vacuum sealed just like you see in

founders and veterans of the food industry, Michael

any big box retailer. Our individual cuts will be in much

Turley, Milo Graff, and Kevin Potter. The company

higher end packaging than you typically see, VSP-ed in

produces and sells premium and kosher beef to

recyclable trays. We are still putting together our direct to

foodservice and retail outlets. They use only Black Angus

customer program so not much to tell you here – yet."

US back in TPP?

length of copyrights, and reduce barriers for express shipment companies.

A

fter making the withdrawal of the USA from the Trans-Pacific Partnership (TPP) trade deal part of

“It’s very, very unlikely that you’re just going to have negotiation on the existing text and have the US say

his campaign promises, US President Donald Trump is

‘oh, we want those suspended articles re-instated

swinging the other way.

and we’ll just sign,” said Charles Finny, a former New

If a “substantially better” deal than what was offered

Zealand trade negotiator. “It’s probably going to be quite

President Barack Obama gets put on the table, he’ll

a long negotiation and it’s probably going to be called

reconsider.

something else and look quite different from TPP.”

The question is: Do the remaining 11 countries in

If the USA comes back to the table, other countries

the deal – since renamed the Comprehensive and

too, such as Japan, are going to renegotiate parts of the

Progressive Agreement for Trans-Pacific Partnership

deal that they’re not happy with. Will Indonesia, which

(CPTPP) – want the USA back in?

bailed on the deal when the USA pulled out, want back in

Mexico and Canada already see the CPTPP as a way of giving them leverage against the USA in the

as well?

US agriculture states, which supported Trump’s

renegotiations of the North American Free Trade

candidacy, have been disappointed by the lack of support

Agreement (NAFTA). With markets assured under the

the current administration has shown them. Although

CPTPP, neither country has to bend over backwards to

the cancelling of TPP was always high on Trump’s list

please the USA.

– and Hillary Clinton’s as well – few thought he would

Following the US withdrawal, the remaining 11

do it without something else in place to help the US

countries renegotiated parts of the TPP, removing some

agriculture industry. Now with NAFTA under negotiation

of Washington’s previous demands. These included

as well – along with a trade war breaking out with China –

mostly terms that would strengthen intellectual protection

the US pork industry and grain feeds industry needs the

(IP) for certain pharmaceutical products, extend the

White House to throw them a bone.

10

May~June 2018

Meat Packing Journal

Debunking Myths.

Uncovering the Facts.

Chicken Squad Intelligence sheds light on chicken farming practices in BC. Follow the investigation at

chickensquad.ca

n e ws

Welsh lamb prices up S

ince the beginning of the year, lamb prices in Welsh

expensive. This, combined with a reduction in the supply

markets have reached high levels not seen for some

of lamb of the southern hemisphere, has affected some supermarkets' policies in terms of buying less meat

years in markets in the UK and EU. According to figures from Hybu Cig Cymru – Meat Promotion Wales (HCC) – lambs have been fetching

overseas.”

"We're in the middle of a high farm-gate price period

above £2 per kilo ($1.22 per lb) for most of 2018, but

in a number of sectors, including beef, but because our

have recently increased further to a weekly average

sheep industry is very dependent on international trade,

of over £2.50 ($3.58), compared to £1.88 ($2.69) in the

the pattern is most dramatic for lamb," said Glesni.

corresponding period over the last two years.

Demand is exceeding the current supply, and this is

"Other factors are also at play, including the impact of bad weather on the supply of animals and an early Easter,"

caused by a number of factors – the weakness of the

she said, "but to a large extent the high price reflects the

pound, the strength of exports, an early Easter, and the

temporary political situation, namely that the result of the

policies of UK retailers.

Brexit Referendum weakened the pound, but the industry

For some months HMRC's trade figures have shown a significant boost in the volume of lamb is exported abroad.

can still trade freely with Europe until March 2019. " "It's difficult to predict how lamb prices will move over

The majority of the increase was to Europe; for example to

the next few months," said Glesni, "but in the long run

Germany where British lamb imports during January 2018

much will depend on the type of agreement reached

were 63% higher than the same month last year.

between Britain and Europe; anything less than free trade

HCC Data Analyst, Glesni Phillips, explained that the position of the pound is an important factor; “The

would be a big challenge for the sheep sector. " HCC is working with AHDB to analyze Brexit's potential

weak pound helps Welsh meat to compete abroad –

impact on agriculture. A series of workshops were held

we've seen a huge increase in exports to countries in

across Wales in January and February to help farmers

Europe and beyond – and of course make imports more

prepare, and research continues.

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The only podcast for the global meat and poultry industry What do US chicken processors, British vegans, Greek butchers, Canadian cricket farmers, Russian agriculture investors, and global steak lovers have in common? They all listen to Meat Talk podcasts.

Meat Talk was created as the first podcast for the international meat and poultry industry. Its initial audience reach, however, has expanded much further as listeners discover the journey narrator Velo Mitrovich takes them on.

As editor of Meat Packing Journal – the only business to business publication to cover the international meat industry – Velo’s unique writing style has attracted a wide, loyal audience. One reader describes MPJ as “the Rolling Stone of the B2B world”.

Velo brings the same approach to Meat Talk.

In listening to Meat Talk, you’ll learn if a chick can really be happy, why Amazon’s buyout of Whole Foods is great news for craft jerky makers, should you be eating bugs, bringing home the bacon, and why truck drivers are in short supply throughout the world – and hear a solution for the truck-dependent meat industry.

“If you thought meat couldn’t be entertaining, think again,” says Velo. “I invite you to spend some time with me.”

Meat Talk is available on Apple Podcast, Stitcher, Podcast Addict, or wherever great podcast live.

n e ws

Another weapon for Salmonella reduction

A

recent university study has found that a new treatment for Salmonella that uses a phage solution,

is more effective than lactic acid (LA) and peracetic acid (PAA) at reducing Salmonella.

Regular readers of MPJ are familiar with phages and their potential in fighting infections that are resistant to antibiotics. In the 1920s and 1930s there was considerable interest in using phages in fighting infections. However, after antibiotics were developed, interest in phages faded.

Now, though, that some infections are proving to be resistant to antibiotics, there has been sudden interest again in phages.

They are the most abundant micro-organism on Earth, with the human gut containing around 1,000,000,000,000; one milli-liter of seawater contains one billion. Around 100 times smaller than bacteria, they cannot be seen under a normal microscope.

The study, carried out by Assistant Professor Amilton de Mello and his team of researchers at the University of

consumer demands for more natural food processing

Nevada, concluded that traditional chemical treatments

aids and industry transparency. Unlike traditional chemical

such as LA and PAA cut Salmonella levels by under

treatments, PhageGuard S kills Salmonella without

60%. However, PhageGuard S, a natural phage solution

affecting organoleptic properties such as taste, odour or

made by Micreos, significantly reduces bacterial levels,

texture in food products.

killing up to 94% of Salmonella in the samples tested.

“Salmonella remains a public health concern, with

These results challenge the perceived effectiveness of

1.2 million cases recorded every year in the US alone,”

traditional chemical interventions for foodborne pathogen

says Bert de Vegt, managing director at Micreos Food

control and highlight phages as a superior and more

Safety. “Although lactic acid and peracetic acid are widely

successful alternative for enhanced consumer safety,

deployed throughout the industry, consumer demand

claims Micreos.

and health and safety concerns call for different solutions.

PhageGuard S, specifically developed to eliminate

This report echoes the results we have observed in

Salmonella in meat and poultry products, is USDA and

numerous commercial trials in poultry, fish and red meats

FDA-approved and 100% organic, addressing increasing

and makes a convincing case for switching to phage.”

Cold Pressure annual conference

technology follows proper processes and procedures

First was the desire that everyone using HPP with no shortcuts.

A

trade group that is developing and creating best practices for cold pressure technology will be

holding its annual conference 18-20 June in Chicago.

“Cold pressure” refers to the use of using high pressure

“HPP is a fantastic technology, and we do not want any ‘bad actors’ misusing the technology and creating a bad image for it,” said Williams. “Another driver was the desire by many existing and new brands to have a logo program

processing (HPP) instead of heat pasteurization to

that would identify that product as ‘cold pressured’ and

preserve food.

verified—as in they are following the proper guidelines for

The Cold Pressure Council (CPC) conference will consist of two days of talks and networking, followed by

safety, validation, and the HPP process.

“The third driver was to create an independent

the CPC’s membership meeting. Exhibitors will also be

organization to help foster the growth and development

showing their latest developments at the conference.

of HPP overall.”

Jeff Williams, chairman of the Council, told Food Safety

For more on HPP use in the meat industry, how it

Magazine that there were several drivers behind the

works, and Hiperbaric’s HPP equipment see MPJ Nov/

formation of the CPC at last year’s ProFood Tech exhibit.

Dec 2016 at www.meatpacking.info/digital-edition.

14

May~June 2018

Meat Packing Journal

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C O M M ENT

Why Do What You Do? I

Instead, we often get sucked in by the forces of fear, doubt,

two long flights. When I arrive, I’ve scheduled a couple of

be an inflection point. Too many of those moments of

calls with clients back home. Late night calls on my end,

darkness in the absence of a clear “why” are what causes

early morning calls on theirs. Sleep is often fleeting; my

us to quit, to get back on the freeway and resume the easy

stress level is high. I struggle to find the time for exercise

route. We figure why not just follow the GPS like everyone

and lack the rituals needed to support a healthy weight.

else?

am on a plane to Malaysia as I write this article. It’s going to be a long trip. There’s a brief meeting bookended by

and self-criticism. That’s a dangerous moment and it can

Yet, I’ve never been happier and more fulfilled in my life, weird huh?

The life of an entrepreneur is anything but easy. It’s hard

I’ve been there, racked by doubt, worry, and fear. With my internal narrative urging me to be a good husband and father and get back on the well-worn path. It’s the safe

work and it’s an undertaking that is somewhat contrary

thing to do. But it’s not. Is it not better to bet on one’s self

to normal behavior. Many, like myself, were taught that

than to bet on others?

the route to success is education followed by a long, safe

Will you do something for me? Will you please take

career working for a stable company. Yet, we didn’t follow

some time and write down your “why”? If you keep it

the map. We veered off the freeway, stuck it into 4-wheel

close to you, it can comfort you when darkness sets in.

drive and took the road less traveled.

It can help you remain resolute and allow you to better

The question is why? Why did we veer off? The answer is different for everyone, but you’d better know that answer.

experience the joy that is the journey.

Why do I do what I do? I do it because I want to make

It will be what sustains you in the dark moments of doubt,

a meaningful difference. I want to help passionate people

fear, and frustration. It will also be what allows you to

with great products succeed. I do it because I am excited

see the beauty in the journey and to feel like the luckiest

to play a small part in changing the way we feed the world.

person on earth to be doing what you do.

I’d also like my adult kids to see that they can blaze their

We spend a lot of our time on the mechanics of our

own trail. Lastly, it allows me to build real relationships with

businesses. We are focused on growing revenue, raising

those whom I work to support, blurring the lines between

money, and building a team. Our heads are down, and we

client and friend.

just push forward. What happens when we hit that obstacle

On this long flight to Malaysia, my clients/friends take

or when things get a little tough? Too often, that’s when

up the rest of the row. Although we’ll be dog tired by the

we begin to question what we’re doing, why we’ve chosen

time we return, the conversations and laughs we’re sure to

something that’s so damn hard.

have along the way are well worth the journey.

At that moment, it’s hard to see or remember our “why”.

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By Elliot Begoun

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How GMO became the world’s worse boogie-man While GMO for plants has been a success – soybeans, rice, wheat, corn, vegetables and fruit – trying to use GMO for animals is a completely different story as AquaBounty has discovered. For those considering the same path, MPJ warns against this, no matter how tempting it might seem.

that you have no control over. An Irish salmon farm was wiped out – losing around $1.25 million in fish – when attacked by a large jellyfish swarm. An Australian tuna ranch was wondering where its fish were going until a surprised diver discovered a Great White shark in the pen.

These are things poultry, beef, and pork producers don’t lose sleep about.

Storms, mussel and seaweed growth, along with hungry seals can destroy nets and cages, killing and/or releasing stock into the sea – which usually comes with a stiff fine from the authorities.

by velo mitrovich

A rise in water temperature or a change in salinity can kill or weaken fish; low temperatures play havoc as

I

well. Salmon normally eat less in the winter. A further

of Agriculture approval would be a relative walk in the

in the best of times becomes a nightmare – not helped

park for AquaBounty, by getting FDA approval it would

by self-appointed anti-aquaculture groups watching your

prove to all doubters that GMO salmon was not harmful in

every move.

t was in the mid-2000s. I was working for an

decrease in water temperature and their appetite almost

aquaculture publication and agreed to visit the San

completely shuts down, slowing down growth, and

Diego research laboratory of AquaBounty, which

adding months to the grow-out phase.

at that time was desperately trying to get US Food & Drug Administration approval for the world’s first

Feed prices, dependent on fishmeal and fish oil, can climb dramatically in 36 months. Add to this a host of

commercial GMO salmon. While getting US Department

devastating fish parasites and diseases, and fish farming

anyway and was completely safe to eat.

Research work at AquaBounty had begun in 1995 and

For AquaBounty and its investors, it only made sense to see GMO as a solution. If there was a way to bring

during those first 10-years, millions of investor dollars had

salmon to full maturity in 16 to 18 months, not only would

poured through the company ¬– like sand through the

the risks be reduced in salmon farming, but so too would

proverbial sieve – except this sieve was made with extra-

production costs. AquaBounty could even take the high

wide holes. But the company was truly onto solving a real

road and claim they were doing this as a solution to world

need in the food industry and backers seemed to keep

hunger. Who in their right mind would complain?

turning up.

For those unfamiliar with salmon farming and think

Little did they know.

Calling its creation, the AquaAdvantage salmon,

it must be as easy as raising goldfish on the kitchen

AquaBounty’s scientists used an Atlantic salmon – the

counter, nothing could be further from the truth. Salmon

most commonly farmed of the salmon species – added

takes longer than any other domestic animal to go from

to it the growth-hormone gene from a Chinook (king)

hatching (birth) to market weight, which can be a time

salmon, the largest of the Pacific salmon species, and

span from 30 to 36 months.

a “promoter” sequence of DNA from an antifreeze

A lot can go wrong in 36 months – a whole lot –

protein gene belonging to ocean pout (a deep-water

especially when your livestock lives in an environment

fish resembling an eel). AquaBounty told me that the

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promoter was the “on-switch” that would keep the fish’s cells making growth hormone year-around.

While the press rumor mill implied then that

Two salmon, one from the Atlantic, the other from the Pacific, both laying/fertilizing eggs in freshwater streams, would not only breed with each other, but also with a

AquaAdvantage salmon would continue to grow, reaching

deep, saltwater fish? “Sure, it could happen naturally – in

the size of a car and beyond, this was impossible.

about a million years or so when the continents rejoin,” he

Although first year growth meant that an AquaAdvantage

said.

salmon was easily double the size of its “natural”

Someone overheard us talking and the scientist was

cousin, by year-three the growth slowed down in the

told not to talk to the press again. I was told the interview

AquaAdvantage fish and they were comparable in size.

was over and that everything that the scientist told me

But what if they escaped their pens and bred with local salmon, creating some sort of genetic monster?

Impossible. The AquaAdvantage salmon would consist

was not for publication, although the scientist – and the company – knew who I was, they provided space for the scientist and myself to talk, and I was writing my notes

of 100% sterile females, meaning if any AquaAdvantage

in front of all. Threats were made of our magazine being

salmon escaped, it would take a Bethlehem-miracle for

sued if we printed anything without their lawyer seeing it

them to breed with local salmon stocks or to create a wild

first. Our editor chose to ignore this and we published. No

AquaAdvantage species.

lawsuit followed.

In talking with others, my experience turned out to be

Own worse enemy

the media-norm in dealing with the company, no matter how pro-aquaculture you were. Oddly enough though, AquaBounty couldn’t figure out why the media seemed

A

lthough AquaBounty was promoting that this

to always have it in for them. When someone coined the

combination of genes was “natural” and they were

word, “Frankenfish” to describe AquaAdvantage salmon,

merely speeding up the work of nature, its lead

the press adopted it without any hesitation, giving the

scientist at the time told me this wasn’t quite accurate.

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company years of negative spin that continues to this day.

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Eighteen-years later, with management changes and more millions spent, AquaBounty has finally secured their precious FDA approval – not that they can sell their fish in

SWOT Analysis

the USA, only in Canada where their fish are not required to be labelled as GMO. In the States, US Alaskan Senator Lisa Murkowski (Republican) is blocking sales until the government issues labeling guidelines, in a guise to protect the sale of wild Alaskan salmon.

In a country where defining the word “natural” seems

Strength Strong science backing Around 10,000 years of proven success GMO products used millions of times a year

an impossible hurtle for the USDA, coming up with a GMO label might take years. Although Congress passed a federal requirement in 2016 for labeling products made with genetically modified organisms – only because a few states started acting on their own –most believe it will take years to phase in.

Even without this final hurdle, restrictions abound with

Weakness Different countries have different regulations Ethical issues involving major seed companies Poor marketing throughout the industry

their operation. To avoid any chance of its sterile females from escaping into the wild, AquaAdvantage salmon must be raised in massive land-based recirculation systems (RAS) – which no one has yet made a sustainable longterm profit with except in small, niche farms such as abalone which can command high profits.

Back to your goldfish tank, you might remember being told that each “inch” of fish requires a gallon of water. To move Canada’s current farmed salmon production to land

Opportunities Right company with right marketing could make a fortune An increased need every year with climate change Reduce feed, diseases, and environmental impact with livestock

based systems – which some groups are demanding – it would require the space of 28,000 Canadian football fields. According to the International Salmon Farmers Association (ISFA), growing 75,000 metric tons of salmon – which is comparable to the amount of salmon currently grown just on Canada’s west coast – in a RAS

Threats Poor science Fake news Uneducated public

environment would require just shy of a billion gallons of water just to fill the fish tanks. This freshwater system would be equal then to one third of the daily domestic

salmon could cause cancer and has a higher allergic

freshwater usage for the entire USA. Water is just one part

potency – all proved wrong by independent government

of an RAS system which also utilizes a system of cleaming

agencies in both Canada and the USA.

filters, feeding equipment, and heating/cooling systems.

The Canadian Biotechnology Action Network (CBAN) is

If all the world’s salmon was grown in RAS, it would

demanding that all retailers commit to never carrying GM

require the same amount of energy to support a city of 1.2

salmon, despite proven sustainability benefits. Last year

million people, claims the ISFA.

CBAN sent out a letter to retailers to get them not to carry

This is the real reason why environmentalists, anti-

GMO salmon. According to Jon Entine, executive director

GMO crusaders, and those opposed to fish farming have

of the Genetic Literacy Project, the letter carries a “very

demanded RAS for AquaBounty’s salmon. They know it

real threat here: do as we demand by this date or we will

cannot be done successfully in the scale needed.

publicity shame you online and on social media until you

In the meantime, AquaBounty is raising its GMO salmon at a secretive location in the Panama, 1,500 meters up a rainforest mountain in the western highlands

comply with our demands”.

And all AquaBounty wanted to do was to grow a better salmon.

of Chiriqui province. When asked by the Guardian

What is GMO

newspaper why AquaBounty chose this out-of-the-way location to raise GMO fish for market, or indeed why it chose Panama at all – the company refused to comment.

If AquaBounty already had a hard-enough time with the media, groups such as Friends of the Earth and others have put out misleading or exaggerated claims that the

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T

hat’s the million dollar question. According to Dr Frank Young, former FDA Commissioner: “The term ‘GMO’ is not defined in statute or

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“

gmo

People also want mandatory labels on food containing DNA Rutgers University

regulation by government regulatory agencies and with

sections of DNA. Scientists can also change an organism’s

good reason. Defining terms that reflect things made

characteristics by introduction new pieces of DNA into

with modern genetic engineering techniques isn’t easy

their genomes. This could be DNA taken from the same

because they don’t represent natural groupings of

species; DNA taken from a different species; or DNA

processes or products. They connote something different

made synthetically in the lab.

to individual commentators, journalists, organizations,

Humans have been doing a low-tech version of this

congressional staffers and members of the public. The

for thousands of years through selective breeding. Native

terms are ambiguous, the source of much confusion and

American tribes in North and Central America took corn

little advantage….”

(maize) which would have only several small, tough

A Google search of “GMO” turns up over 21 million hits.

kernels, and over a long period of time, transformed it

It would seem everyone has an opinion on the matter,

into ears of corn which we would recognize today. Olives,

with most negative.

wheat, poultry – all domestic animals, major grains, fruits

For sake of argument, however, let’s use the definition

and vegetables have been created through selective

from Genome Research Limited. “GMOs – genetically

breeding. Saltwater commercial fish and game animals

modified organism – are organisms that have had their

are some of the few species we eat that have not gone

characteristics changed through the modification of

through this process.

their DNA in a way that does not happen naturally. To

Genetic engineering allows us to directly alter the DNA

create a GMO, scientists change specific characteristics

of organisms without having to go through all of the steps

by using lab techniques to delete or alter particular

of breeding them over many generations. The gene for a

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desirable trait is isolated from a separate organism and

growing concerns of the public, and realized they could

inserted into the target, either manually or attaching it to a

make a tidy profit by playing on these fears.

harmless virus.

Perceived danger

GMO risks not proved

N

o harmful effects have ever been proven to have come from GM products and on balance the global benefits of GM crops outweigh the

F

or much of the general public, GM crops and animals are a direct threat to the health of themselves and their families and the number of

those believe this is growing. In 2000, according to survey

risks, according to a peer-reviewed 2014 analysis into

data from the National Science Foundation, around 20%

the impact of GM crops, published in the science journal

of the US population felt this way. By 2016, the number of

PLOS One.

respondents who find GMOs dangerous shot up to 79% –

According to the Genetic Literacy Project, there have been numerous long-term studies on GMO seeds and products. Many of these studies cover periods of two or

and remember these respondents are in the USA which uses more GMO crops than any other country.

Anastasia Bodnar, policy director of Biology Fortified,

more years, with some covering multiple generations

believes though the results of the survey many not be

of animals. Indeed, animals feed GMO feed have been

accurate. For example, in a 2013 study from Rutgers

monitored for more than 20 years.

University, researchers asked: “What information would

Globally, food-producing animals consume 70-90% of

you like to see on food labels that is not already there?”

genetically engineered crop biomass, mostly corn and

Only seven percent raised the issue of GMO labeling.

soybean. In the USA alone, animal agriculture produces

However, when people are specifically asked about

over 9 billion food-producing animals annually, and more

GMOs, the number of people who want them labeled

than 95% of these animals consume feed containing GM

increases sharply. An overwhelming number of people

ingredients.

also want mandatory labels on food containing DNA,

In 2014, animal genomics expert Alison Van

when asked specifically about DNA in food. A course, with

Eenennaam and assistant Amy Young at the University

all living things on Earth containing DNA, this question

of California-Davis examined data on 100 billion animals

showed that prompting people about specific food

covering trillions of meals over nearly three decades—

characteristics clearly leads to results that are skewed

before and after the introduction of GMO feed in 1996:

higher than if questions are asked without a prompt,

“An extensive search of peer-reviewed literature and field

according to Bodnar.

observations of animals fed diets containing genetically

Around the world, there are 26 countries that allow

engineered crop products have revealed no unexpected

GMO crops to be grown, while around a dozen ban

perturbations or disturbing trends in animal performance

farmers from planting GMO crops. Like with all things

or health indicators. … the performance and health of

GMO, this isn’t as straightforward as it seems. While

genetically engineered-fed animals were comparable

the majority of EU member states have banned the

with those fed near isogenic non-engineered lines and

cultivation of GMO crops, Europe imports over 30 million

commercial varieties.”

tons per year of corn and soy-based animal feeds, the

However, one of the complaints most heard about

vast majority of which are genetically modified, for its

GMOs is the lack of safety studies, in particular on

livestock industry, according to Mark Lynas for the Cornell

humans. “We need long-term safety tests that are

Alliance for Science.

relevant to human health done by people who are

If your livestock is fed GMO feed, does it then have

independent of GM vested interests. The safety testing

to be labeled GMO? In the majority of countries, the

done now is woefully inadequate,” says Judy Carman of

answer is ‘no’. This infuriates some organic or non/GMO

Australia’s Institute of Health and Environmental Research.

organizations which calls into question companies/

Some of beliefs regarding how GMOs adversely affect

products such as the US yogurt brand Chobani which

human health include: an increase in food allergies;

claims to use no GMO ingredients in its yogurt but relies

obesity; gluten disorders; infertility; birth defects; cancer;

on milk from cows eating a diet of GMO feed.

and DNA transfer of GMO food from your gut to your

At this point you have to be wondering why anyone

bloodstream. Many look at when widespread obesity and

would bother investing two cents into GMO research,

gluten disorders started in the USA, compare it to when

especially involving animals. There are huge potentials,

GMO crops were introduced, and make the connection.

however. According to Yvonne Badke, a senior

Cynical people would say that the producers of organic and non-GMO food products, looked at the

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biometrician in Bayer’s breeding research group, animal GMO research could lead to the following:

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u Reducing the amount of resources necessary to produce an animal product by increasing feed efficiency, and reducing growth time u Decrease environmental impact by reducing waste in manure which causes methane gas u Increase disease resistance: producing animals resistant to common pests or diseases that will increase

to be transplanted into humans with a decreased risk of rejection u Produce high-value materials, such as those used for surgical sutures and personal protection devices, such as body armor for military and law enforcement use u Provide more healthful or more efficiently produced food

the overall efficiency of production through decreased

The bottom line

loss of animals and decreased necessity for chemical intervention (medication, pesticides and fungicides) u Producing pharmaceuticals to be used for other animals and humans u Serve as a source of cells, tissue and organs closely matched to humans so that they may be able

Gene editing will be the future MPJ believes that while GMO in not the answer for the meat industry – not due to any inherent risks in it but because of extreme negative public opinion – gene editing is where the future lies. While civilization has been defined by movements, such as our change from being nomadic to agricultural base, the genetic revolution is next in a long line. The potential to transform the world’s agriculture industry with lasting positive changes for a growing population are enormous.

However, for this to happen it will require the governments of the world and their regulatory bodies to show the slightest degree of courage and common sense. In January the EU, which is against GMO in foods for humans, took a first stab at how the new techniques might be regulated. Asking in a report if gene editing could be exempt from the same laws concerning GMO, the decision was, we don’t know.

Gene editing has recently been approved by the USDA for plants used in human consumption, without the need for regulation or for consumer labeling. This technology allows for precise changes to be made to the DNA of living cells.

How precise? Down to one character with absolute precision, which is something most of us find totally incomprehensible.

While gene editing (GE) sounds extremely similar to genetic modification (GMO) there are fundamental differences between the two.

GMO is an organism produced by introducing DNA not native to a species. As in the case of AquaBounty’s GMO salmon [see main article], DNA from a Chinook salmon and an ocean

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lthough on paper there is every reason in the world why you should invest in GMO animal research, in reality there is every reason why you

pout (a deep-water fish resembling an eel) are introduced into an Atlantic salmon creating a new species that grows faster and larger than regular Atlantic salmon. Gene editing, on-theother-hand, makes changes to optimize the function of the same species.

GE enables precise breeding within a species, selecting and using only genes that are already present and native to the species. The process allows agriculture researchers to quickly make the exact same changes that previously would have taken years, with or without human intervention, says proponents.

One of the upshots of this process for the fruit/vegetable industry is the speed in which changes can be made, allowing for flexibility in dealing with changing conditions such as weather or salinity in soil. This is on top of creating plants immune to diseases, or having bigger and better tasting fruit.

It’s no wonder that with all of the red tape and costs involved with GMO products, only the big players got involved and it’s been with grains or vegetables with massive market potential such as soybeans or corn. According to Wired magazine, the move by the USDA to allow innovation where there is no risk present, will “shave years and millions of dollars off the cost of designing a designer plant” and will enable smaller startups and public institutions to enter the market. “You no longer have to be a Monsanto or a Dow DuPont Pioneer to take your custom cultivar into the grocery aisles of America,” says Wired.

But, will it translate over to the meat industry?

Recombinetics thinks so.

Recombinetics (RCI) is a Minnesota-based

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shouldn’t even toy with the idea.

While people are willing to accept science and

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a product’s ingredient(s), you can’t label it as non-GMO without a descriptor. For example, since there are no GMO

technology in medicine and even cosmetics, they are not

oranges on the market, a non-GMO claim would have to

will to accept the same when it comes to food.

state something along the lines of “like all oranges, these

Supermarket chains have realized that there is big money in supporting peoples’ fears in regards to their

oranges are not a product of genetic engineering.

Thanks to the Internet, too many people with zero

food. Case in point, the amount of gluten-free food for a

science background or common sense have been given

medical condition that in reality affects only a very, very

a platform to spout reasons why children should not be

small percentage of the population.

immunized, how your blood type affects what foods you

Stores are doing the same with GMO. Products such as oatmeal, which has never been a GMO crop, have labels proudly proclaiming to be GMO free. In Canada, the

should eat, and why GMO foods are hazardous to all of our health.

If a sizeable majority in a survey are concerned about

government has finally taken action on this, stating that if

DNA being in the foods they eat, GMO does not stand a

there aren’t genetically-engineered varieties available for

chance of success.

biotechnology company founded in 2008.

It’s today one of the world’s leader in gene engineering and is foremost in gene engineering for livestock.

The company is divided into three divisions, two on the medical side and Acceligen, RCI’s agriculture division. Acceligen is using state-ofart breeding methods to precisely deliver natural, elite traits that accelerate genetic improvements in swine, beef, dairy cattle, and aquaculture fish.

Some of the things that Acceligen is working on are: castration-free swine, PRRSv disease resistant pigs, heat tolerant livestock, and cows that are naturally hornless so will not require painful disbudding process.

One of the intuitive needs seen by many animal breeders is to produce cattle that are heat tolerant. FAO statistics clearly show that the parts of the world that will have the greatest population growth are the most difficult places to grow animals. This is due to feed issues, diseases, and often times extreme heat.

Tad Sonstegard, chief scientific officer of Acceligen, says: “Just by removing one base in a gene, we can adapt an animal to a tropical environment. People cross-breed Senepol and Angus to make crossbred cattle with higher meat quality and thermal tolerance. In this case, we are taking one specific base deletion from Senepol and moving it into Angus. There are other gene variants that enable this same thermal tolerance, which means we have multiple ways to naturally make these animals thermal-tolerant.”

While every government in the world’s agriculture department should be demanding gene editing technology, this is far from being the case.

“Through a rigid interpretation of their legal authority under the [USA] federal Food Drug and Cosmetic Act the Food and Drug Administration (FDA) has decided they want to treat this and other gene edited animals as if the edited gene is a new animal drug, and must be subjected to the years of scrutiny and expense drug approval entails,” says Val Gidding of the Genetic Literacy Project.

“The foolishness of this has been well described, as well as the policy failure in FDA’s inability to find a way to exercise the discretion Congress clearly intended them to use. But far from responding wisely to such constructive criticism, FDA seems intent on moving ahead with a misguided policy that would not improve safety but will definitely crush innovation.

“The situation is so intolerable the livestock industry has risen in revolt, demanding Congress prohibit FDA from doing so and assign the authority to less hidebound and ideological stewards at USDA,” says Gidding.

meatpacking.info

In Carl Sagan’s Cosmos series, he talked about in one episode the mathematical achievements ancient Greeks were making on the island of Samos located just off modern Turkey.

Then pirates attacked and all was loss. Sagan theorized that if this hadn’t happened, modern technology would have been developed over a thousand years earlier and we would already be out in the stars.

Gene editing could be just as revolutionary and just as powerful. Will it be allowed to develop, however, or will the ‘pirates’ of government red tape and a scientific illiterate public be permitted to destroy it?

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lamb

On the ropes, US MPJ cannot think of a single other protein industry that can find reason to boast of a per capita consumption of only 1 lb. But when you’re American lamb, you take whatever victories you can. MPJ reports

I

n the spring a meat lover’s fancy turns to lamb –

a guide to seek opportunities to work collaboratively on

except in the USA where each year seems to have

these core strategies.

less lamb eaters than the year before. Indeed, it is

In a nutshell, the strategic objective of the plan is to

estimated that at least one-third of Americans have

increase demand for American lamb by two percent

never even tasted lamb.

annually over the next five years, for a total demand

The reasons given are numerous ranging from

American soldiers during World War II were fed an excessive amount of tinned mutton, forever making them lamb haters which they passed on to their children.

Other reasons given is that lamb has a strong flavor

growth of 10%. They are after lamb consumers where ever they may be found in the world.

As readers of MPJ are aware of, the American lamb industry continues to face substantial challenges from declining sheep numbers, loss of infrastructure, extreme

which puts off Americans who prefer bland tasting

price volatility, and declining market share. Imported lamb

proteins like chicken breast, cornfed beef, or tilapia. The

now represents more than half of the lamb consumed in

cost of fresh lamb, too, is a factor.

In trying to turn this around, the American Lamb Board (ALB) has approved a new four-year strategy.

This 2018-2022 long-range plan is designed to help focus the work of the American Lamb Board and its stakeholders on fundamental strategies that must be executed to build demand, and to sustain and strengthen the American lamb industry.

The American Lamb Board says it will use this plan to create its budgets and annual work plans, and encourage industry partners to use it as

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L AM B

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lamb fights back the US – which still isn't much.

As overall sheep production in the US continues to

household incomes of $75,000 or more are at least twice as likely to have eaten lamb than those with lower annual

decline, there are also fewer and fewer lambs available

household incomes. Urban shoppers are the most likely

for the traditional market due to competition from ethnic

to consume lamb with the highest consumption on the

and nontraditional markets. Many sheep producers are

two coasts.

taking proactive approaches to sell their own products

Global exports

directly to customers and foodservice operators, thereby bypassing traditional marketing channels.

The volume of sheep and lambs direct marketed and sold into ethnic markets from auctions is an estimated 1.3 million head yearly out of the 5 million head total.

Per capita consumption of lamb in the US has remained steady over the past 10-years at around 1

I

f those at home won’t eat lamb, then American producers are willing to afar. Growth in the total global population, and particularly growth in the global

middle-class, provides opportunities for lamb. The global

pound per person per year. To put this into perspective as

middle-class is expected to grow from 2 billion people

to how high of mountain the ALB has to climb, last year

to 5.9 billion by 2030. There is also a global shortage of

US per capita consumption of beef was 58 lb; pork 50 lb;

lamb — global production is currently failing to match

and chicken 109 lb.

growing consumption demand. This means there is

More than one-third of US consumers have never tried lamb and nearly 20% of US lamb consumption

an opportunity to increase global supplies of US lamb. This

occurs during the spring holidays.

Income plays a huge role in lamb consumption as well.

Consumers with annual

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lamb

Lamb being processed at US Superior Farms Banss usa

also means that supplies of imported lamb to the US can

realizing how these factors are important to the savvy

potentially decline as they find stronger opportunities in

consumers they want to attract.

other markets, freeing up supermarket chilled counter space for US lamb.

A US lamb consumer tends to be well educated,

According to the 2018 Power of Meat study, 42% of supermarket shoppers would like to see their meat department offer more meat and poultry raised in the

have a higher income and specifically looks for healthy,

United States, 40% want more antibiotic-free, 39% want

high-quality foods. They are questioning where their

more all-natural, and 38% want more hormone free/no

food comes from, how it is raised and how it influences

added hormones.

the health of the environment. Fine dining chefs and progressive retailers are also asking these questions,

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However, as MPJ has found, what shoppers say they want and what they actually buy – even when given

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Lamb board Core strategies Grow Awareness and Increase Usage of American Lamb among Chefs and Consumers More than a third of US consumers have never tried lamb and the average annual consumption is less than one pound. Lamb is less than 1 percent of fresh meat retail (supermarket) sales.

Many consumers only eat lamb once or twice a year for holidays or special occasions and many only eat lamb at restaurants. There is great opportunity to increase lamb consumption/ demand by building awareness and educating consumers, media, retailers and chefs about the adventurous flavor, culinary versatility and variety of cuts to inspire usage beyond holidays and beyond the rack.

Goal: By 2022, increase retail sales of lamb and increase lamb menu items by 10%.

Promote and strengthen American lamb’s value proposition We have to ensure that we give our customers enough value to justify the premium price, plus finds ways to gain production efficiencies, reduce costs and price our products more competitively.

Goal: By 2022, increase the number of consumer who agree that positive American lamb attributes heavily outweigh the negative.

Improve the quality and consistency of American lamb The American lamb industry is extremely diverse in terms of production management practices, breeds and genetics, lambing seasons and age of animals at time of harvest.

As a result, quality, flavor and size can be inconsistent. Strengthening or improving the

a choice – tend to be two different things. In the May/

L AM B

I n s ig h t

consistency of our products will help our industry deliver consumers the same high quality eating experience every time.

Goal: By 2022, validate the technology and implementation process at major lamb plants that will detect and remove off-flavors of lamb, and provide accurate feedback on carcass quality to producers.

Support industry efforts to increase domestic supplies of lamb Imported lamb now represents more than 50% of the total lamb consumed in the US. The industry needs to address increasing domestic supplies in order to capture market share for lamb sales and grow demand.

Goal: By 2022 increase domestic lamb’s market share by 5%.

Collaborate and communicate with industry partners and stakeholders to expand efforts to address the first four strategies The American lamb industry is too small not to have strong collaboration and communication among its partners and stakeholders. With the limited resources available to support and promote the American lamb industry, it only makes sense to work towards common goals that will benefit all segments and industry organizations and maximize the industry’s investments in the Lamb Checkoff program.

Goals: Improve industry trust and openness to changes required to address the first four core strategies. Leverage all industry resources to address the first four core strategies.

Strengthen American Lamb Board relationships with industry stakeholders and allied industry organizations. Increase industry awareness of the American Lamb Board.

While overall US consumers are demanding more

June 2017 issue of MPJ, editor Velo Mitrovich discovered

transparency regarding food production practices, the

that in northern California, a supermarket chain which

challenge is changing demands into supermarket sales.

proudly proclaimed on store banners “Thousands of

The American lamb industry has a great story to tell,

local products”, did not feature US lamb even though

but also needs to continually evaluate and improve

one of the USA’s largest lamb processors was less than a

production and management practices to authentically

10-minute drive. When asked why, the chain’s marketing

respond to consumer interest and concerns about lamb

person said it was providing what shoppers wanted, lower

production. Growing consumer interest and demand for

price New Zealand or Australian lamb even though it

grassfed and antibiotic-free meats offers opportunities for

came from over 10,000 miles away.

the American lamb industry.

meatpacking.info

May~June 2018

29

I n s ig h t

U S

lamb

adventurous with American lamb.

Minority populations consume more than half of the lamb produced in the US. The American Muslim market alone includes 1.7 million households and $98 billion in disposable income. Minority populations have unique dietary restrictions and needs based on their culture and heritage. The lamb industry needs to pay close attention and address their needs.

Nutritional value

T

here is growing consumer interest in lamb as a nutritious lean protein with rich flavor. This is being driven by trendy diets and fitness programs such

as Paleo, Clean Eating and Crossfit. Consumers are being told to eat more lamb by their trainers, nutritionists and friends. Lamb offers consumers that are interested in health and wellness a lean protein alternative that is out of the ordinary.

The price of all meats has increased during the past several years, with lamb leading the way. In the US, American lamb supermarket prices are often significantly higher than imported lamb. One of the biggest barriers to increasing lamb consumption is price. Not only is American lamb priced higher than other protein choices

Lamb and millennials

and higher than imported lamb, price volatility inhibits increased usage. Chefs, retailers and consumers are buying less American lamb because of price swings.

C

onsumer cooking habits and meal preferences

American lamb will always be priced at a premium,

are changing. Consumers are spending less time

but the industry must ensure that its prices remain in a

preparing meals at home but also eating more

competitive range with other premium alternatives and

adventurously through ethnic/global cuisines. Growth in

that American lamb’s value attributes are enhanced. It

the US of ground lamb sales indicates that consumers

is very important that the value attributes of American

want approachable cuts and products with which they are

lamb are effectively communicated to chefs, retailers

familiar with cooking and serving.

and consumers. One of the best ways to improve the

Millennials now represent nearly one-third of US

perceived value of American lamb is to reduce its price.

consumers, and are a driving force in the growth of lamb

To do this, it requires the industry to decrease its costs

demand. They do not have the bias against lamb that

through improved productivity so that American lamb

older generations have, and they are adventurous eaters

price stays within a closer range of imported lamb price.

who want bold, interesting flavors.

“The future holds tremendous promise for our industry

It is important for the American lamb industry to

which produces a unique, flavorful, tender and nutritious

respond to Millennials and build a brand with product

protein that meets the changing needs and preferences

attributes that resonate with this important audience.

of consumers,” says Jim Percival, ALB chairperson.

Millennials are interested in food and cooking; for them,

“Improving the quality and consistency of our products

food is a form of entertainment and a way to express

to ensuring consumers have a great eating experience

themselves. They seek unique tastes and foods with

every time, increasing our industry’s productivity and

authentic stories. American lamb can fit their needs and

stabilizing our prices are all critical to the success of

interests, while fulfilling the emotional appeal Millennials

creating demand for American lamb.

“We trust that other stakeholders and allied industry

desire.

Digital communications are key to reaching this

partners will seek opportunities to align their plans with

audience. Therefore, the American Lamb Board should

this and find ways to support the industry-wide objectives.

leverage digital technology to engage and connect with

We all benefit when we focus our efforts to build demand

this important consumer group, inspiring them to get

for American lamb,” says Percival.

30

May~June 2018

Meat Packing Journal

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25-04-2018 12:56:57

e s ta b li s h e d

m a r k e t

spain

Exports behind Spanish pork surge 32

May~June 2018

Meat Packing Journal

spain

Last year was a significant one for Spain’s pork industry. For the first time ever, Spain saw its pork exports exceed €5 billion ($6.17 billion), with revenues of €15 billion (418.52 billion). This made Spain the third largest producer of pork products worldwide, with sales to over 130 countries. Not bad for a country more famed for its jamon ham. MPJ reports

e s ta b li s h e d

W

m a r k e t

hen Spanish pork producers in the years to come look back, 2017 will be a year to put smiles on their faces. Thanks to lower feed prices and lower hog production costs by

improving efficiency, the industry has experienced higher domestic demand and increasing Spanish pork exports.

And the prices they’re getting? They’ve gone up as well. The average price for 2017 was $1.56/kg live weight compared to $1.40/kg live weight for 2016.

In Spain, according to 2017 Eurostat official data, Spanish total swine beginning stocks increased by 3%, reaching 29,231 thousand heads, continuing the upward

by velo mitrovich

meatpacking.info

trend of the past few years. Breeding sow numbers in

May~June 2018

33

2017 reached 2,415 thousand heads, a 2% decrease and

as slaughterhouses, as well as through co-operatives –

in June 2017 number of breeding sows increased by 6%,

such as Coren and Guissona – that began operating at

meaning an expected rise in total slaughter this year. Pig

various levels of the production chain. Meat companies

production may continue the upward trend in 2018 but at

such as El Pozo and Valls developed their own integration

lower rates.

processes. The final wave of consolidation came from

Spain’s pork though is more than just number and percentage points. According to Albert Herranz, director

large supermarkets such as Carrefour, Eroski and Mercadona.

of the Interprofessional Agri-food Organization for White

As in most of the world, an increase in production and

Pigs (Interporc), pork has contributed to Spain’s national

efficiency means fewer, but bigger farms. Spain has been

wealth, helping in creating a positive trade balance and

no exception with this.

creating 300,000 direct jobs and more than 1 million indirect, mainly in rural areas.

Historically, pork production in Spain occurred mainly

According to Food & Water Europe, an organization against factory farming, the total number of pig farms in Spain has declined dramatically in recent years. From

in the western part of the country, where farmers raised

1999 to 2009, more than 110,000 farms disappeared, a

traditional Iberian pig breeds in the extensive farms and

loss of 61.4% in only a decade. Over that same period, the

forests of the region. Industry consolidation began in the

country’s total pig population increased 12.3%, to nearly

1960s with the development of the feed industry, a key

25 million animals. Of the pig farms that remain, 80% are

factor in the emergence of factory farming. Today, the pork

considered intensive operations, together hosting some

industry is controlled by vertically integrated companies

90% of Spain’s pigs. This trend continues.

that provide the feed, animals, production standards, while

While Food & Water Europe cites reasons to be

farmers are contracted to raise and fatten the animals for

against this, such as environmental problems due to

sale at a previously agreed upon price.

manure overload, odor effecting local communities, and

Since the 1960s, consolidation processes have

contamination of water supplies, only by concentrating

emerged in other areas of the production chain, such

stock and processing can you have an increase in cost-

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Meat Packing Journal

SWOT Analysis Strength Structured itself to take advantage of Chinese demands Has increased domestic sales Global vision of its product and market Weakness Environmental issues have been overlooked Pork is a volatile industry Long term labor Opportunities Growth in demand for its pork products Spain will continue to modernize industry Labor issues will necessitate more robotics/automation

“

Threats A market today does not mean a market tomorrow African swine fever Growing Russian production

World Development Indicators 2016

Spanish traders successfully used jamón ibérico to open markets in Asia’

Population 46,445,828 GDP (current $ Mil) 1,232,088 Trade balance (current $ Mil) 35,855 Unemployment rate 19.6%

USDA

effective efficiency. While in perfect world every young

pig production, intensive and similar to US commercial

Millennial would dream of herding pigs foraging in forests,

hog production. The second is the traditional jamón

the reality is, few Millennials want to work in the livestock/

ibérico, a cured ham produced only in Spain

meat industry.

Two lines, two pigs

T

he USDA says when looking at Spanish swine

According to Spain's Denominación de Origen rules for food products, jamón ibérico must come from pigs that are at least 50% from the black Iberian breed. This pig lives primarily in the central and southwestern region of the Iberian Peninsula.

After weaning, the piglets are fattened on barley and

production it’s important to note that there are two

maize for several weeks. The pigs are then allowed to

distinct product lines. The first is the modern white

roam in pasture and oak groves to feed on grass, herbs,

meatpacking.info

May~June 2018

35

Although Spain's ham are more well know that its fresh pork, fresh wins out by a huge, huge margin

others

Source: Interporc bacon

sausage and cured pork

cured Ham

fresh, chilled or frozen meat

5000

4000

3000

2000

1000

0 2007

2008

2009

2010

2011

2012

Spain's pork production displays steady, sustainable growth with only a few minor hiccups

2013

2014

2015

2016

2017

2018

best weathered the pork price crisis – very low prices in late 2015 and early 2016 caused by Russian sanctions – and so was among the first in the EU28 to gain positive

acorns, and roots, until slaughter. The hams are salted and left to begin drying for two weeks, after which they

profits with the rebound of pork prices.

Spanish pork exports are growing quickly in Asia as

are rinsed and left to dry for another four to six weeks.

a result of the internationalization procedures that the

The curing process then takes at least twelve months,

Spanish swine producers and industry together with the

although some producers cure their jamones ibéricos for

support of the Spanish Government, have implemented

up to 48 months.

to meet the increasing demand in Asia. Spain arrived in

Jamón ibérico is a high-value gourmet product with a

the Chinese market one year in advance of the rest of

distinctive, nutty, flavor, eaten thinly sliced as an appetizer.

the EU because the Russian ban affected Spain one year

Spanish traders successfully used jamón ibérico to open

before the rest of the EU.

markets in Asia, first to this gourmet product, and then to Spanish pork from white pigs.

Spain took the first to market advantage and sold the image of top-quality Spanish pork in China and rest of

The Spanish white swine sector is very efficiently

Asia. While some exporting countries have the attitude

structured and integrated resulting in one of the most

that the customer needs to adapt, Spain is a customer-

efficient swine producers within the European Union with

oriented supplier with a variety of cuts and is quick to

one of the lowest production costs. Within the EU Spain

adapt to Asian customer specifications. Spanish Iberian

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May~June 2018

Meat Packing Journal

Spain Animal Exports by Country 2016 France

1,774,830

accordance with total slaughters and higher competition in China and global pork demand.

Meanwhile, domestic pork consumption (real consumption as there is not private storage) shows a

Portugal

1,749,600

Italy

1,746,620

China

829,525

restaurants and tourism.

Germany

478,691

trend in 2018. The Spanish swine and pork industry

Japan

455,025

continues promoting the consumption of pork to

United Kingdom

349,548

slight increase after following a downward trend during the last years. The increase is due to higher demand in Domestic consumption may continue this upward

consumers, doctors, and the media.

Spanish pork exports are the driving forces behind the

Netherlands

259,334

production increase of the last three years as Spanish

Libya

244,421

50% of its pork production.

USA

217,850

Unit: US$ thousand | Source: GTA

meat consumption is stabilized so Spain has to export The primary destinations for Spanish pork exports in 2017 were France, China, Italy, Portugal, and Japan in volume terms and France, Japan, China, Italy, and Portugal in value terms. Spanish pork exports to China were around 23% lower than the same period in 2016,

Spain’s animal output 2016 Cattle

17.2%

Pigs

39.6%

Sheep and goats

5.9%

Poultry

13.9%

Milk

17.5%

Eggs

6.2%

Unit: Gross Value | Source: European Commission

however in 2017 Spain has become the primary pork supplier to China, surpassing Germany. Japan, South Korea, Hong Kong, the Philippines, Taiwan, Singapore, and Eastern Europe continue to show important growth.

Also, Spanish pork exports to the United States increased 63%, reaching 10,485 CWT, with a value of $46 million.

According to the Spanish pork industry, Spanish pork exports are estimated to remain stable in 2018. Higher world pork production and stronger competition with the U.S. and Brazil may reduce the Spanish pork exports outside the EU-28 during 2018. The Spanish pork industry is also watching the pork market trade evolution between Brazil and Russia.

Robotics required pork products are unique and open the market doors to Spanish white pork meat in Asia and in the rest of the world. The success of the Spanish pork is due to several factors such as, the integration of the swine

S

pain’s capturing of the pork market would not have happened without its processing plants modernizing, which has meant using robotics

and pork sector, a sector very efficiently structured and

as much as possible. This need for automation will only

integrated with a sustainable and safe production model,

continue to be more of a factor in Spain’s industry.

specialization in all of the areas of the value chain, and the global vision of producing to the world as one market.

Spanish meat processing equipment company INTECAL is the country’s largest and has been in business for more than 30-years, giving it a ringside seat for the

Pork production

country’s developments.

Oscar Bernado of INTECAL, tells MPJ that he is not

A

ccording to MAPAMA in 2016, Spanish pork

surprised with Spain’s achievements in pork.

“No, not really because it has come in increments that

production increased 8.5% compared to previous

have occurred steadily over the past 20-years and thanks

year, reaching 4.181 million metric tons (MT).

in large part to exports,” he says. “But, in any case it is

Spanish pork industry estimates a slightly increase of 1.5%

true that 20 years ago I would not have predicted today's

for 2017 – once all figures are in and totaled – reaching

production in Spain.”

4.250 million MT and another growth of 1.5-2% in 2018 in

meatpacking.info

According to Bernado, Spanish pork producers have

May~June 2018

37

e s ta b li s h e d

m a r k e t

spain

been making large investments in modernizing their

pig slaughterhouses equipped with AIRA robotics in the

plants with an eye towards future increased production.

Spanish market.

One problem that is pushing them into action is a lack of skilled labor.

“Labor is getting to be a real issue. Today in the slaughtering and deboning plants, there are a lot of

Despite Spain’s success in pork and its adopting of robotics, for some this is hard to comprehend, thinking of Spain as only a traditional, craft producer of pork.

In a way, though, this is understandable. Hiperbaric,

workers from other countries,” says Bernado. “To stay

which designs, develops and builds some of the world’s

competitive in Spain, in the pig high capacity slaughtering

most advanced high pressure processing units for the

lines there are robots doing numerous jobs like splitting

food and drink industry, got its start in 2002 building its

carcasses, opening carcasses, bung dropper, and more.

first machine for Compofrio meat factory to treat dry

“We’re finding that anything that either reduces labor

cured pork products.

or makes jobs faster and easier are very popular with the

Other Spanish meat

processors. This includes equipment like AIRA robots in the slaughtering lines and BANSS equipment for slaughterhouses, Butina CO2 stunning for pigs, pneumatic and electrical trimmers like Bettcher’s Whizards, and derinding and membrane skinning machines.”

According to INTECAL, there are currently around 16

38

May~June 2018

I

n 2016 Spain continued to see an upward trend in cattle production which began in 2014 due to the higher demand from third countries. Like with pork,

Meat Packing Journal

exports are driving this market. Experts predict that cattle

Spanish cattle industry expects to maintain Spain’s live

production will likely continue increasing the herd through

cattle exports to third countries in 2018, reaching 200,000

2018.

cattle to slaughter exported to third countries, about 70%

According to Eurostat, total cattle beginning stocks

more than in 2016.

increased by two percent in 2017, reaching 6,317,640

Beef

head. Beef cattle enjoyed 1.6% growth of beginning stocks with 1,950,440 beef cows. Official data in June 2017 shows the continued upward trend of the last few years and experts predict that Spain will reach maximum cattle levels in 2018. However, fertility may decrease in 2018 due to the extreme drought experienced in Spain during 2017 and lower feed efficiency.

The Spanish Ministry of Agriculture (MAPAMA) says

I

n 2017 Spanish domestic consumption grew and will likely slightly increase in 2018 due to the growth in restaurants and tourism. Like with pork, the Spanish

beef industry continues to promote the healthy aspects of beef consumption to doctors, media, and consumers.

that the number of cattle slaughtered reached record

According to MAPAMA, in 2016 Spanish beef

levels in the first ten months of 2017 compared to the

production increased 1.7 percent year on year with

same period the previous year due to strong demand

657,000 MT and, according to the latest official data,

from third countries.

continues to grow up to one percent in the first ten

Spain is a net importer of live cattle coming from

months of 2017 reaching record levels. Thus, in 2017 beef

other member states. In 2016 Spanish live cattle imports

production may grow following the recovery started in

increased 12% coming mainly from France. During YTD

2014/2015. According to the Spanish cattle and beef

(January-October 2017) live cattle imports increased 188%

industry, 2018 may continue this upward trend increasing

due to the strong Spanish cattle demand, coming mainly

the beef production approximately another 0.5 percent

from France with important growth from Netherlands, UK

due to the growth of cattle herd for export markets.

and Germany. For the same period Spanish live cattle-for-

Spain is a net exporter of beef. Ninety percent of beef

slaughter exports increased 47%, with a 28% growth to the

imports come from the EU-28. Outside the EU, Spain

EU-28 and a 52% increase to third countries namely Libya,

imports beef mainly from Brazil and Uruguay. Exports

Lebanon, Turkey and Egypt.

of Spanish beef follow an upward trend since the last

MAPAMA opened the Turkish market to Spanish live

three years both to the EU and to third countries. Spanish

cattle-for-slaughter in June 2017 and according to the

beef exports continue to grow to third countries due to

industry, this will become the second most important

high demand from Algeria and Hong Kong. The Spanish

destination for Spanish live cattle exports. In June to

beef industry is also focused on new strategic markets.

October 2017 Spain exported 31,462 live cattle to Turkey.

According to the beef industry, priority markets 2018 will

Also Algeria and Morocco are important markets for

be Asia, especially China, Vietnam, and the Philippines,

Spanish live cattle. Spanish live cattle exports balance

Middle East– primarily Saudi Arabia – and North Africa. In

the Spanish cattle industry, stabilize prices and ensure

2016 Spain opened the Indonesian market which led to

a predictable supply to Spanish slaughterhouses. The

significant, rapid growth.

meatpacking.info

May~June 2018

39

s pe c i a l

r e p o rt

rise

of

pork

World pork on a high The USDA stats are in and all with the pork industry are breathing a sigh of relief, it should be a good year. Still, as every processor knows, there are always a few dark clouds off on the horizon.

While they’re losing as much as 190 yuan ($30.33) per pig, the price of feed is shooting up thanks to the trade war with the USA which has jacked up the price of US soy and sorghum.

According to the USDA, Mexico is really getting into pork with an import forecast of nearly 11%. Hong Kong is expected to be just shy of 8% but MPJ thinks this figure could rise. Already Hong Kong is a funnel for US beef

by mpJ staff

going into mainland China, with a wink-wink, nudgenudge pretense that it’s not. If the trade war between

A

China and the USA continues to be waged and US pork

giant player and the two big producers – will finish on the

and subsequently lower demand, the impact on overall

up swing.

export volumes will largely be offset by increased US

lthough a lot can happen between now

faces a 24.3% tariff, along with a value-added tax bringing

and December 31, it looks like the world

it up to 50.7% for entering the Chinese market, you can

production of pork will be up 2.29% over

bet your bottom dollar some importers will try to get

last year, according to the US Department

around this and have their US pork shipped to Hong Kong

of Agriculture’s semi-annual publication,

and then across the border into mainland – but you didn’t

Livestock and Poultry: World Markets and Trade.

The three big players – though to be exact, the one

The world’s largest producer by a considerable amount, China, is expected to see a rise of 2.34%, with its exports increasing by over 8%. Going just by percentage

hear that here.

While US shipments will be hit by China’s high tariffs

shipments to other markets including Mexico and the Philippines.

Although the USDA included Japan in the countries

points, the USA will see the largest bump of nearly

where more US pork will be going, this might not happen,

5% growth. The EU, with 28 hog-producing nations, is

or if it does, this will be the last big year.

number two in overall production and will see an increase of around 1.5%.

Other countries in the pork ‘black’ are Russia, Vietnam,

In December, Japan and the EU announced the finalization of negotiations on the Japan-EU Economic Partnership Agreement (EPA). One major outcome is that

Canada, the Philippines and Mexico. Japan and Brazil are

the agreement will eliminate, or sharply reduce, duties

the only two major players expected to be in the ‘red’,

on agricultural products in which the EU has a major

but that can change for Brazil if it, along with EU and

export interest, such as pork. Pork is one of the EU’s

Canadian pork, displace US product that would have

main agricultural exports to Japan and they are a fierce

been going to China.

competitor of the United States.

World pork imports are expected to see only the

Given that the agreement grants the EU duty-free

smallest of rises, with both the USA and China seeing

access for processed pork meat and low-duty access for

imports down due to increased local production.

fresh pork meat exports, it will result in a significant duty

In an article that broke on Reuters, some Chinese pig farmers are adjusting expansion plans or putting planned

disadvantage for US exporters.

The most common type of meat consumed in

projects on hold because of a glut in the market which

Japanese households is pork, accounting for almost

has led to hog prices hitting an eight-year low in March.

half of the overall volume of retail meat sales in 2016.

40

May~June 2018

Meat Packing Journal

rise

of

pork

s pe c i a l

r e p o rt

largely been uncompetitive in the fresh/chilled pork sector, according to the USDA. All is not doom and gloom though for US pork heading Consumption trends are unlikely to change as Japanese

east across the Pacific. South Korea, which is already the

consumers continue to shift away from fish towards pork

USA’s second largest beef market by value, is increasing

and other meats. The European Commission estimates

its imports of US pork, a trend that should continue.

that the Japan-EU EPA will eliminate duties on more

There are two things that MPJ will be keeping its eye

than 90% of EU agricultural products, making European

on for the remainder of the year. Much like how Russian

products more affordable and more attractive to Japan’s

responded to trade sanctions by considerably upping

consumers. The Japan-EU EPA could enter into force as

their own pork production – forcing EU countries such

early as 2019.

as France to find new buyers – China has already been

Japan ranked as the world’s largest importer of pork

steadily increasing its own production. Complete self-

and pork products in 2017, growing imports from $4.9

sufficiency in pork would truly prove Chinese President Xi

billion in 2016 to $5.2 billion in 2017 (a 6% increase).

Jinping has the mandate of heaven.

Japan’s top imported pork products are frozen pork and

What might prove, however, to be a bigger problem

fresh/chilled pork. The United States remained the top

is African Swine Fever (ASF) in Belarus. According to

pork supplier to Japan for over a decade, until 2017 when

Polish news server Charter ’97, the Belarus government

the EU matched US pork market share at 33 percent.

is denying there is a problem, although a half million pigs

Other suppliers of pork and pork products to Japan include Canada (21%), Mexico (8%) and Chile (2%). The

seemed to have disappeared off the radar.

Russia’s Minister of Agriculture, Alexander Tkachev,

EU currently leads the market in frozen pork exports to

said: “Yesterday the ASF virus was found in the finished

Japan, supplying $1.6 billion in 2017. The EU has been

meat products brought from Belarus. It seems that our

able to dominate Japan’s frozen imports, with decreasing

colleagues from Belarus’ veterinary service hide the

volumes from the United States and Canada, because

presence of ASF outbreaks on the territory of the country.”

it supplies high-value cuts such as single-ribbed

Russia’s veterinary inspection service,

bellies and loins for use in Japan’s bacon and loin-ham

Rosselkhoznadzor, has taken the step to ban the

processing industry.

importation of pigs and their genetic material, pork and

The United States is the main supplier of fresh/chilled pork accounting for 53% of the market. Fresh and chilled pork is primarily consumed by the Japanese hotel,

raw pork meat products, and a host of other pig/pork products including leather and bristles.

This is far from being the first time that Belarus has

restaurant and retail sector and requires short delivery

tried to hide the presence of this highly contagious viral

times where the US holds an advantage. The EU has

disease of pigs.

meatpacking.info

May~June 2018

41

s pe c i a l

r e p o rt

rise

of

pork

Good planning is half the pork battle You can have the best equipment, a decent workforce, and still not operate at the efficiency you think you should be at. What MPJ has noticed throughout the world is that the final piece of the puzzle in pork production is a product planning system that lets managers oversee every step of the process. This allows for flexibility in processing and cuts costs.

Timo Schaffrath of CSB and MPJ report

volumes, good luck trying to keep track.

Traditional planning tools have difficulties in balancing the effects of short-notice shifts or unplanned machine and system downtimes. This often results in an inaccurate overall picture that ultimately leads to inefficiencies, high costs and reduced delivery reliability.

IT-aided production planning and control systems developed specifically for the pork production are more precise and yet more flexible. Ideally, enterprises do not use stand-alone solutions, but a program integrated in their ERP (enterprise resource planning) system.

Only the ERP system as a data turntable is capable of seamlessly incorporating all key company areas like

by TIMO SCHAFFRATH

procurement, inventory management, coverage planning and sales as well as the production defaults and the single production areas in the planning process. Other

T

important criteria that a production planning system must

op quality, guaranteed freshness, justin-time delivery - and all of this at a good

meet include: 1) It ensures that raw materials, auxiliary supplies and

price – the customers of pork producers are

operating materials are planned optimally and that the

demanding to say the least.

right raw materials are supplied with the right quality at

What makes this difficult to accomplish

is that production processes are becoming ever more complex, as consumers ask for a wide variety of products with different flavors, ingredients, and packaging. In

the right time and at the right machines.

2) The system facilitates high-level planning and detail planning.

3) It plans the optimal production sequence so the

addition, the time between order entry and delivery is

orders are produced in such a way that the required set-

getting shorter and shorter, with urgent orders often

up times are reduced to a minimum. This is particularly

having to be squeezed in. Trade in particular expects that

important in companies with many products. The

even short-term orders are delivered on time.

important influencing factors for sequence planning are

On top of this, line equipment is getting more

color, granularity and ingredients (allergens/GMO) as

sophisticated. While this allows for an increase in

well as operational requirements. The sequences are

production and oftentimes a reduction in labor, if all

default values that should be easily changeable, and the

segments of production aren’t tied together, the ‘weakest

impacts on the production process should be identifiable

link’ becomes obvious and production slows down or

immediately by staff.

halts altogether.

This is when things start to get hectic: Which order must be completed first? Do you still have enough raw

4) It must be possible to deploy the system in small and large-scale planning environments.

5) It ensures a constant high-capacity utilization at all

materials in stock for the minced meat line? Are the right

manufacturing levels and in the individual departments.

labels available in sufficient quantities? How long will the

This will prevent overtime hours in one department,

packaging lines be running.

while the staff in another department is not working at full

It goes without saying that in such situations, in light of proliferating variants as well as increasing production

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established at a yearly, quarterly or monthly level, based on the statistical sales data. It is supplemented with the budget values and the liquidity planning based on that.

Long-term planning is based on the order forecast and the resulting capacity utilization. The sales data for all customers in a year-on-year comparison are incorporated in the long-term production planning. Long-term planning also helps with strategical investment decisions, for example, when it comes to buying new machines.

Mid-term planning. This is about required raw materials, with the right quantity and the right quality, being actually available in the operation at time X. Midterm planning is based on the plan values of long-term planning and is created for instance on week level.

Short-term planning. Short-term planning considers the results of the two previous planning stages and supplements planning with operational data from the ERP system and from intralogistics. The decisive question here is, how do I produce my orders with maximum utilization rate and with the minimum use of resources?

Software orchestration

B

esides these ‘must-haves’, it is vital that the software provides several planning scenarios.

Only then can it orchestrate the production in an

optimal manner while leaving sufficient flexibility for the processing planners.

For example, production planning in the CSB-System

Dependencies become transparent

A

t the end of the planning process, only a few questions remain unanswered: The production orders are distributed automatically to the

machines and lines in production and packaging, the staff is assigned automatically in accordance with qualification

supplies long-term, mid-term and short-term planning

and availability. So the perfect plan then? No, because

scenarios. This highly flexible planning tool enables you to

basically it doesn’t exist: public holidays, campaigns and

schedule, organize and control all production resources

finally the weather have a huge influence on sales, and

like man, machine and material, in an optimal manner

thus directly on production planning. A sudden summer

even in difficult conditions caused by volatile order

high for instance spurs the sale of light dishes, barbecue

behavior and a vast variety of units.

products, and summer drinks. However, if the weather

This secures the required freshness, optimal utilization of machine capacities and a higher throughput speed - and maximum delivery readiness. A customizable

is cooler than expected, perhaps more pork cuts for roasting are sold instead of ribs.

In that case, it is good if the software not only includes

planning matrix presents a clearly structured overview of

historic data, but is flexible enough to modify planning.

relevant information such as orders, available quantities,

But has everything been completed as planned?

bills of materials, restrictions and procedures linked with

Good planning is half the battle, as the saying goes.

time dimensions.

However, even the best plan isn't worth a thing if it is not

Be it long-term, mid-term or short-term: planning is

followed. It is therefore highly recommended to organize

always based on the same program. Usually, the process

production planning in combination with automated data

has three stages.

capture. This is the only way for the persons in charge

First, the planning matrix is established. The planner or materials requirement planner can then revise the calculated production quantity. After that, the production

to get reliable feedback in the form of target-actual comparisons - be it in their office or on the move.

Using real-time production monitoring, they can

plan is prepared for the next stages in the planning

intervene quickly and take control. It also gives them

process. Every company defines itself, usually on product

important insights, for instance to optimize manufacturing

group basis, what it considers as long-term, mid-term or

processes in the long term, to make processes more

short-term production planning. The important thing is

efficient and to reduce rejects. In the future, that much

that the planner is supported with every time horizon.

is certain, it will be essential to produce more while

Long-term planning. The production plan is

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consuming less.

Meat Packing Journal

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Bigger and better than ever

You’ve been to IFA in Germany and IPPE in Atlanta, now this is the show that sounds like fun. MPJ reports

new for this year – and the Varied Industries Building. In addition to the indoor space, producers will find outdoor exhibitors as well as hospitality tents.”

There’s never a shortage of things to do and see

T

at Expo. Always high on the list are the nearly two

he 2018 World Pork Expo will mark its

dozen free educational seminars. The PORK Academy

30th anniversary by presenting the world’s

and Business Seminars run throughout the day on

largest pork-specific trade show with more

Wednesday and Thursday, allowing Expo attendees to

exhibit space and featuring more US and

catch a discussion on topics such as marketing, herd

international companies than ever before.

health, nutrition, employee management and much

Presented by the National Pork Producers Council

more. Pork producers and their employees can meet

(NPPC), the trade show takes place Wednesday, 6 June,

leading experts and hear the latest developments in pork

through Friday, 8 June, at the Iowa State Fairgrounds in

production and business strategies.

Des Moines.

“The Expo’s 30th anniversary is a great time to look

Although the show is held in the heart of America’s pork producing state – close to dead-center of the USA

back at all we’ve accomplished as pork producers,”

– according to Fricke, the show is extremely relevant to

says Jim Heimerl, NPPC president and producer from

those outside the USA.

Johnstown, Ohio, “But more important, it provides us

“World Pork Expo is the largest pork-specific trade

with the perfect place to look forward to the many

show in North America, so it’s an opportunity for

opportunities and advancements that lie ahead.”

international attendees to learn more about US pork

Each year, more than 20,000 producers and pork professionals visit the three-day exhibition to attend educational seminars, learn more about the latest

production practices, while networking with their peers from around the world,” says Fricke.

According to Fricke, the show will always stay swine-

industry innovations at the trade show and network with

specific. The chances of coming and seeing egg sorters

peers. There are even family events as well.

is nil.

As all shows evolve over time, the World Pork Expo is no exception. “One of the most significant changes

“We will continue to grow the show to offer the latest technology for pork producers around the world,” he says.

has been the shift from a consumer focus to an industry

One thing to be aware of, which always sees MPJ

trade show focusing on pork producers,” Doug Fricke of

caught short, unlike Frankfurt, Chicago, or Atlanta which

National Pork Producers Council tells MPJ. “The show has

can all easily absorb 20,000 to 40,000 people without

continued to grow with nearly 500 exhibition companies

batting an eye, Des Moines is smaller. The time to start

expected at the 2018 World Pork Expo. Indoor exhibits

planning for the 2019 show is now so you will not be

will be located in both the Jacobson Exhibition Center –

disappointed.

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HIPERBARIC, S.A.

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BARCELONA 08-11 MAY

Hall 4 Booth 239

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Labor in pork industry will continue to be tough sell An Iowa State University study, commissioned by the National Pork Producers Council, notes changes in the pork industry – It's going to be a challenge. MPJ reports

Y

and Lee Schultz – all at Iowa State University – point out, the unemployment rate in the USA has dropped significantly over the last nine years. Workers can be picky and those with skills and/or education can be even more selective where they work. A pork processing line is seldom anyone’s first choice of a job.

In the case of pork production firms, there is a need

ou almost expect everyone in the industry

for both skilled and unskilled labor. Not only is there a

to say: “Tell me what I don’t know.” What

demand for manual or unskilled labor, but the increasing

they do know is this, labor costs are rising

levels of technology and science driven production

on pig farms and pork producers. A lower

methods mean that operations need workers with higher

pool of eligible workers is available who can

levels of knowledge, skills, and abilities. Many of these

then demand higher salaries; US Immigration officials are

positions are best suited for workers with college degrees

targeting meat plants; tougher US/Mexico border policing

or post-secondary education training.

is cutting down on undocumented workers; and with

Agriculture in general and particularly the hog industry

fewer refugees being allowed into the US, it all means

has changed dramatically in recent decades, from an

pork processing plants and hog farms are beginning to

industry largely utilizing family labor to an increasingly

wonder how business will continue as is.

capital intensive, technology, and science driven one

Poultry plant operators told MPJ at this year’s IPPE that labor was getting to be a huge factor.

“A basic worker’s salary is $35,000, we have to add

with a significant demand for hired full-time skilled and unskilled workers.

From 2001 to 2015, employment in the swine industry

another $35,000 on top of that for medical insurance,

grew by an annual rate of 2.1 percent, a rate three times

taxes, and other expenses, and then training is around

faster than employment growth in all US industries. Even

$30,000,” one told MPJ. “Each employee then costs

during the worst recession since the 1930s, the hog

$100,000 and some plants experience close to 100%

industry created jobs. Total and weekly wages in hog

turnover every year!”

production jobs have also grown significantly faster than

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For the pork industry, it’s similar tale.

the average of all US industries over this 15-year span,

As study authors Christian Boessen, Georgeanne Artz,

says the 41-page report.

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The robust demand for labor in the hog industry is against a backdrop of increasingly threatening

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2007 to 2017 the rural labor force shrank in seven of the eight largest hog producing states.

macroeconomic and demographic trends. The most

A final, and important, trend that is exacerbating the

immediate challenge to hog production firms in the

ever-tightening rural labor market is the declining flow of

industry has been the strengthening of the broader US

immigrants into rural labor markets. Over the last 30 years,

labor market with the US unemployment rate falling from

the immigration of foreign-born workers offset some

10% in 2009 to 4.1% in early 2018.

of the decline in rural native-born population and labor

This low rate of national unemployment still understates the tight labor supply in most of the largest

force.

That trend had likely already reversed even before

hog production states where unemployment is near or

the recent emergence of political sentiment toward

below three percent. Furthermore, in the largest hog

stricter immigration controls and increased enforcement.

production states the labor force participation rates are

Furthermore, an increasing proportion of the large influx

generally well above the national average, indicating little

of immigrant workers that came to the US in the 1980s

or no slack in these local labor markets.

and 1990s are aging beyond their prime working years.

Ever improving economies and rapidly falling

Population shift

population growth in immigrant sending countries are increasingly changing the calculus of potential

T

immigrants. There are more and better jobs in many

he most threatening trend facing hog producing

immigrant-sending countries and the baby-booms in

firms in the longer term are the demographic

those countries that fed the immigration waves in recent

realities in the non-metropolitan counties where

decades are past. These trends, in an environment of

hog producing firms are overwhelmingly located.

Population growth has been slowing in US non-metro

tighter immigration rules and enforcement, combined with the negative growth in native-born rural populations

counties for decades and large swaths of rural America

almost certainly portend decades of increasingly difficult

have had negative growth or loss. But since 2010, a

labor market conditions for all rural firms including hog

tipping point may have occurred with the overall non-

producing firms.

metro population growth rate turning negative. In almost

The authors conclude with this. The pork industry is

70% of non-metro counties, out-migration and deaths

currently in a period of growth. This begs the question

have significantly outpaced births and in-migration.

of whether concerns and current trends in the labor

The aging rural workforce that remains is increasingly

market have or would affect a firm’s decision to expand

unable and unwilling to do the strenuous labor that

operations or invest in the pork production sector. A

agricultural work demands. As more rural residents age

response by one industry participant though was rather

beyond their childbearing years, this negative trend in

optimistic and motivating, “No it wouldn’t, we simply have

population and labor force will likely accelerate. From

to find ways to attract people to our business.”

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Maximum profits with marinated chops Making the humble pork chop valueadded is a good way to add to your profits. Marel and MPJ report

easy, and are one of the easiest meats for an outdoor BBQ beginner to master.

Because they are so easy to cook and popular, pork chops are well suited for added-value presentations; adding value to chops through marinating is an

P

ork is the world’s favorite meat and in the

increasingly common process in the food industry.

This allows processors to fully utilize and increase

USA, pork chops are the leading fresh pork

the value of different meat cuts and at the same time

cut that shoppers go for. While called by

meets the consumer demand for new, exciting flavors

different names, for most of the rest of the

and products that are easy to prepare. With the right

pork-eating world, the popularity of the

equipment that doesn’t waste the marinade and keeps

humble chop is just as high.

This is understandable. Not only do pork chops taste

great – the favorite meat of Homer Simpson – they are near-impossible to ruin when cooking. All a consumer

labor costs to a minimum, maximum profits can be achieved, says MPJ. A major German supplier of pork is a believer.

Oldenburg Convenience GmbH in Lower Saxony,

needs are a hot skillet, a bit of oil, salt, pepper, and

Germany, was founded in 2008 as a processor of

around eight to 10 minutes later, you have a perfectly

convenience meat products. Since its merger with Danish

cooked chop. On a barbecue, chops cook just as fast and

Crown Fleisch GmbH in 2013, the company produces

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portions and packages around 250 metric tons of pork

time production are the key to success in our business,”

and beef per week, including fillets, marinated meat

explains Hubbermann. “The ValueSpray is very easy to

varieties, bratwurst, cutlets, and seasoned products. The

clean and set up for the next production run. I can have

company currently has 121 employees, mainly from the

the whole thing up and running again in just 5 minutes.”

Oldenburg area. Its customers include European Trade

What attracted Oldenburg Convenience to using the

Discounters Plant manager Claus Hubbermann oversees the

ValueSpray instead of traditional dipper systems is its ability to generate substantial savings. It sprays marinade

plant’s production lines and is a great proponent of

directly onto the meat product, allowing for a much

creating value-added products. For marinating boneless

smaller marinade reservoir than in dipper systems.

pork chops, he likes Marel’s ValueSpray unit.

“It’s the savings,” he says, “along with the flexibility the system allows. And both are substantial.

“As a supplier to a large supermarket chain, we have to produce large amounts of pork to different specs at

“If we change marinades between production runs in a dipper system, a lot of marinade is simply lost. With the ValueSpray, our overall marinade use has reduced by as much as 30%,” says Hubbermann.

“Together with the 2.5 to 3% yield increase realized

relatively short notice. Especially in the summer season,

by the OptiCut [a volumetric portioning machine] and

the morning’s weather forecast determines the day’s

the reliability and precision of the Value Drum, we are

product varieties as well as volumes.

very satisfied with the performance of our line-up,” says

“This means that short-term flexibility and just-in-

meatpacking.info

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indonesia

Indo-opportunities If you can recall a childhood book, Indonesia is like the Little Engine that thought it could – except in Indonesia’s case it’s one Big Engine. But no matter how much it thinks it can become a world player and climb that mountain of economic success – can it? We-think-itcan, we-think-it-can.

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by velo mitrovich

N

othing is completely straight forward with Indonesia. Like other Islamic countries such as Iran, it’s two countries in one. In one, it’s sane, rational, and progressive.

The government has just launched

‘Making Indonesia 4.0’, a plan to turn the country into one

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SWOT Analysis Strength Indonesia’s per capita gross income and spending has recorded sustained growth in real terms between 2011-2016 Consumer expenditure as a percentage of Indonesia’s GDP also rose during the same period Steady rise in middle-class Weakness Despite rise in middle-class, social class E (the lowest income class) remains predominant in country High food costs caused by food policies Poor infrastructure and transport links Zero success with trade deals

of the world’s biggest economies by 2030. In the ‘other’

Opportunities Middle-class wants more – and better – proteins such as beef More youth going overseas for university, exposed to western poultry/meat (packaged, sold at supermarkets). Will expect the same back home.

If food self-sufficiency policy continues, they will need help If they realize the failure of the concept, they will want food imports

Indonesia, radicals engage in bomb attacks, education and opportunities are limited – especially for girls – and regions threaten to break away.

Which side will win out in the end?

If you ask the World Bank, they definitely have a view. In its latest East Asia and Pacific Economic Update,

Threats Islamic fundamentalism Population growth Natural disasters such as earthquakes, tsunamis, volcanic eruptions, and floods

the World Bank is optimistic about Indonesia's recent economic performance as well as its future prospects.

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The country's FY-2017 gross domestic product (GDP)

meat producer in the world isn’t flying into Jakarta this

expanded at the fastest pace in four years, led by

second to take advantage of this amazing opportunity.

stronger investment and net exports.

Unfortunately, there is a reason that starts with a ‘g’ and

Meanwhile, its current account deficit narrowed to

ends with a ‘t' – its government.

a six-year low, while the central government's budget

Confusion reigns

deficit reached the lowest since 2014, on the back of stronger global trade and strengthening commodity prices Euromonitor International’s Income and Expenditure Country Briefings focuses on key emerging markets with the best middle-class potential; it has recently

B

lame it on Indonesia’s colonial past when its rich natural resources fed the coffers of the Dutch, or during the harsh Japanese occupation – who

profiled Indonesia. This year the country recorded the

many thought at first would be Indonesia’s liberators –

world’s fourth largest middle-class – 52 million people.

or the hardship years that followed, but food remains

This is expected to only keep rising, making this group a

a major issue in Indonesian politics. All of Indonesia’s

prominent consumer force in the country. The continued

presidents, from the autocrats, to the generals, to the

expansion of Indonesia’s middle-class can be mainly

democratically elected, have struggled with this issue.

attributed to falling poverty, improved income equality

Current President Joko Widodo – Jokowi to his friends – is

and government measures to boost middle-class

up for election next April. MPJ can guarantee the worry of

purchasing power.

food prices rising keeps him awake at night.

For the meat industry – both investors and importers –

What drives each successive government’s food

this is great news for it’s a proven fact: meat consumption

policy is an awkward combination of both commitment

follows the middle-class. Whenever middle-class

to the idea of food self-sufficiency – kedaulatan

numbers increase, so too does the country’s meat

pangan – which is encased in law, and hypersensitivity

consumption.

to voters’ expectations that basic foodstuffs should

At this point you should be wondering why every

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remain affordable, according to Rainer Heufers and

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Arianto Patunru of the East Asia Forum. As it is today, achieving the second objective is near impossible, due to the fundamental problem that “Indonesia’s political

confidence and risk index

leadership largely ignores the importance of imports for food security and believes incorrectly that food insecurity

Business Climate

comes for a dependence on imports,” says Heufers and Patunru.

Trade deals

On the world stage Indonesia is far from being the only country which has – or had – this policy, but most seem

Political system

to finally accept that food imports make economic sense.

In 2015, Indonesia’s food sovereignty policy hit the

Coruption

point of being ridiculous when millions of chickens were culled due to government mismanagment.

International support

The trouble began when the government cut live cattle imports – mostly from Australia – which drove up

Agricultural resources

beef prices. This in turn drove consumers over to poultry, which in turn drove up the price of chicken. With the turn-

Poverty

on-a-dime nature of the chicken industry, it was relatively easy to quickly increase production. This in turn caused

Education system

an oversupply of chicken, which drove the price down to where live birds on farms were selling at 12-18 percent

GDP growth

below production costs.

“The government was the referee for this cull,” says

Infrastructure

Krissantono, chairman of the Indonesian Poultry Breeder Companies Association. “Increasing consumption isn’t

Infrastructure development

just about increasing production capacity. It’s also about whether the consumer can absorb the products. This

International logistics

wasn’t calculated carefully at the time.”

Right now Indonesia produces around 75-80% of the

Government transparency

food it requires; in an efficient world, it has the land and water resources to produce 100%. But just because a

Budget deficit

country can become food self-sufficient, should it?

The USA, Canada, and Australia are all members of the

Starting a business

self-sufficient club, but even they import food to give their consumers better variety, for example fresh watermelon

Enforcing contracts

in the middle of winter, or cheaper prices. Saudi Arabia is at the opposite extreme with importing 80% of the food

Paying taxes

it needs, realizing it makes more sense to pump oil from desert sands than to try to grow wheat. In Indonesia,

Legal rights

beef is extremely popular with its Muslim majority. But, because they try to produce as much as they can locally

Construction permits

the majority on small farms – it is more expensive for its consumers than what shoppers pay in neighboring

Buying property

countries whose citizens are much wealthier.

According to the East Asia Forum, those in Indonesia who complain the loudest about imported foreign foodstuffs are typically not the people who have to

Source: Reby Research, Coface, World Bank

worry the most about their next meal. “Fretting about the provenance of one’s food is a preoccupation of more affluent voters, and they are outnumbered by those more concerned with price and availability.”

The end result of this mishmash of polices is despite the economic growth that Indonesia has experienced, around 14% of Indonesians are still unable to meet their

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daily dietary needs. This puts Indonesia in the 2017 Global

Self-reliance in food

Food Security Index at 69th out of 113 countries. This score has barely changed in five years.

While signing a free trade deal might be seen as some

Indonesia’s Food Law No 18/2012 emphasizes that the state has an obligation to secure the availability and access to adequate, balanced safe, and nutritious food consumption at the national, regional, and individual levels in all regions of the country by utilizing local resources, institutions, and culture.

The Law strongly mentions that the state should pursue food sovereignty and food self-reliance. Consequently, food import is only allowed when domestic production cannot meet domestic consumption or the commodity on demand is not produced in the country. There are five strategic commodities that fit into this law are: rice, maize, soybean, sugar, and beef cattle.

as a way of improving Indonesia’s food problems, trade deals are not something the government does.

With much fanfare Indonesia was going to join the Trans Pacific Partnership deal, but when the US pulled out – one of President Donald Trump’s first acts – Indonesia pulled out too. With Trump now saying he wants to be a part of the TPP, no one is sure if Indonesia will follow suit.

The major reason why Indonesia is so reluctant to join trade pacts is that Indonesia does not regard itself competitive enough to compete with foreign counterparts – especially when it comes to manufactured goods – while at the same time its huge population would be a magnet for trade partners’ cheaper – yet higher quality – goods. As South Africa and others have discovered, it’s hard to compete against low-cost US poultry.

You should note, when Indonesia does agree to import food, things have a tendency to go wrong. Importers have to go through a complex licensing process that involves different government departments; each step adding to

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36,000

7 6 4000

‘000 tonnes

kilograms

5 4 3

3000

2000

2 1000

1 0

0 Veal

Beef

Pork

Poultry

Palm Oil

annual per capita meat consumption

Natural rubber

Coco

Tea

top value agricultural produce

Although the per capita looks small, its looking at the entire population. Regardless there is huge growth potential

While the quanity of rice produced is high, when looking at value of production, it's down on the list

Statisa 2018

indonesia investments

the risk of kickbacks and graft.

Indonesia is “still losing out” to neighbors such as

For example, there was ‘Beefgate’.

the Philippines, Vietnam, and Thailand. It is common

In 2013 an anti-corruption court sentenced Luthfi

knowledge that “sudden and constant changes in

Hasan Ishaaq, president of the Prosperous Justice Party

regulations create instability that is hard for any investor

(Indonesia’s largest Islamic party) to 16-years in jail.

who’s willing to take a risk with their capital”, he says.

Ishaaq was found guilty of money laundering and bribery

Indonesia has sought to scale back a so-called

after receiving kickbacks from a frozen meat importer

“negative investment list” that restricts or caps sectors

in exchange for pressing the agriculture ministry to

open to foreign investors. Two-years-ago President Joko

significantly increase the company’s beef import quota.

Widodo’s administration opened up sectors ranging from

His top aid was caught paying for sex with a college

e-commerce and telecommunication equipment in a

student in a hotel and admitted to laundering bribe

move dubbed “Big Bang”.

money by giving gifts such as cars and diamonds to 45

But Widodo’s pledge to revise the list further is yet to

women, including an adult magazine model and other

materialize and recently, the President himself recently

female celebrities.

warned that Indonesia was losing out to neighbors in

Unfortunately, this is just one of numerous corruption scandals involving food that have taken place over the

export markets.

“This big country of Indonesia is inferior to Thailand in terms of exports. With enormous resources and human

decade.

resources, we are losing. There is something wrong and

Tough for investors

something has to be changed,” the state news agency Antara quoted him as saying in a speech at the Trade

T

he chief of Indonesia’s Investment Coordinating Board (ICB) says that frequent and abrupt changes in government regulations were discouraging

Ministry. “Thailand, Vietnam, Malaysia have more stable regulations,” he said.

If anyone has, one country that has spearheaded agriculture investment in Indonesia is its close neighbor

foreign investors from putting money into Southeast Asia’s

Australia. Indeed, Australia’s northern city of Darwin is

biggest economy.

closer to Jakarta than to Sydney. When it comes to seeing

According to Thomas Lembong, head of the ICB,

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opportunities in Indonesia’s food industry, Australia has

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2

meat production in ‘000,000 tonnes

2013

2009

1.5

1

0.5

0 Chicken

Pork

Beef

Goat

Sheep

meat production

As in much of the world, while beef is what people want chicken is what they get

country), with a quarter living on Java, the world’s most

USDA Gain

ethnic group, comprising over 40% of the population,

populous island. While the Javanese are the largest all total there are 300 distinct native ethnic groups, with

by far been the lead player, with some believing the Australians have it so tightly wrapped up, why bother.

MPJ believes there are two things wrong, however,

more than 740 different language and dialects spoken.

There is an economic and political divide in the country, that favors the south-central half. Due to this,

with that view. The first is, Australia’s population is just

the eastern half of the country, along with the far west,

slightly over 10% of Indonesia’s. If you’re an Australian

has suffered from a lack of government spending. The

and want to expand your beef or poultry business, you

current administration as allocated 60% of its three-year

would be a fool not to consider your closest neighbor,

infrastructure budget to the eastern region for roads and

especially one with that population. The second is, due to

piers.

the proximity of the two countries, Australian news covers

On paper, it looks like the government is providing real

events in Indonesia that the rest of the world ignores.

teeth for improving Indonesia’s infrastructure with a total

Case in the point: Borneo’s recent massive oil spill caused

budget of $358 billion. But this figure is false as dentures.

by a broken pipeline. Indonesia isn’t an unknown to them;

While the government’s budget might say a certain

it doesn’t have to be to you either.

figure, that doesn’t mean the funds are there. In the case of the massive $358 infrastructure budget, much of that is

Infrastructure impossibility

to come from regional and state governments. Even the private sector is supposed to cough up 37% of this figure.

Do any of these groups have the money?

A

challenge that Indonesia faces like no other

In the year before the budget was agreed, the World

country on Earth is its magnitude, consisting of an

Economic Forum's Global Competitiveness Report 2015-

archipelago of 13, 466 islands – 922 permanently

2016, ranked Indonesia 62nd out of 140 economies in

inhabited – and a mountainous topography on land with

terms of infrastructure development, a mediocre ranking

more active volcanos than any other country. From east to

for a country with so much potential.

west it extends 3,181 miles and over 1,000 miles north to

Since the era of reformation replaced former leader

south. While being in the tropics much of it experiences

General Suharto's authoritarian New Order government

year-round precipitation, some areas have a distinct

in the late 1990s, expansion of Indonesia's infrastructure

wet and dry season, with the dry season being such an

has not been able to keep up with its robust economic

extreme that droughts are common every year.

growth and the country is now paying the price. As a

Its population is 266 million (the 4th most populated

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consequence, Indonesia's economic growth fails to reach

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6000 2012

‘000,000s of usd

5000

2000

4000

3000

2000

1000

0 Capture fish production

Aquaculture production

fish production

Aquaculture will only continue to grow in Indonesia.

Already massive shrimp companies have farms there.

Aquastat

its full potential, according to Indonesia-Investments.

Lack of adequate infrastructure also seriously undermines the attractiveness of Indonesia's investment climate. Potential foreign investors are hesitant to invest in manufacturing facilities in Indonesia when, for example,

Indonesia’s top 6 Charoen Pokphand Indonesia PT Charoen Pokphand Indonesia is Indonesia's largest producer of poultry feed, day old chicks and processed chickens. Its core business is the agrobusiness, specifically the manufacturing of poultry feed that accounts for 70% to total revenue. The company also has a dominating market share of about 35% in day old chicks Japfa Comfeed Indonesia Japfa is the second largest poultry producer in Indonesia. The company, a unit of Singapore-based pan-Asian agrofood firm Japfa, is focused on animal feed manufacturing, chicken breeding, poultry processing, and aquaculture farming.

Sierad Produce The company is the third largest integrated poultry company in Indonesia with a portfolio of business from downstream to upstream, ranging from animal feed processing, breeding and hatchery, broiler and layer farms, chicken slaughterhouse, and producer of processed food product.

the supply of electricity is uncertain or transportation costs are high, says Indonesia-Investments.

Despite the abundance of energy resources, Indonesia is often plagued by blackouts – particularly outside the

Wonokoyo Group Surabaya-based Wonokoyo Group is Indonesia’s 4th largest poultry producer.

bigger cities on Java and Bali – because of shortages in the country's electricity supply. Meanwhile, according to data published by the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) around 17 percent of a company's total expenditures in Indonesia is absorbed by logistics costs, while in peer economies this figure is below 10%.

Malindo Feedmill PT Malindo Feedmill Tbk is an Indonesian company that produces and sells poultry feed, particularly broiler feed, and day old chicks. It controls an 8% market share and is Indonesia’s 5th largest poultry company.

These matters obviously make investors think twice before deciding to invest in Indonesia. Meanwhile, logistic problems (which includes transportation, warehousing, cargo consolidation, border clearance, distribution and payment systems) make it tough for existing entrepreneurs and businesses to expand.

It is far from just investors, however, who have to concern themselves with the lack of infrastructure.

According to Dikanaya Tarahita and Muhammad Zulifkar Rakhmat of The Diplomat, poor quality roads and

Sujaya Group South Korea’s leading livestock and animal feed company Harim Group has taken over Sujaya poultry feed and hatching egg producing company, making a foray into Indonesia’s poultry market. The Korean company plans to invest 60 billion won ($52.8 million) including operating funds in its new Indonesian business.

the absence of other alternatives make it difficult for large and heavy vehicles transporting goods to reach the rural

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areas of Indonesia, thus isolating them from equitable

used, the middle-class is expected to expand to at least

distributions of primary goods and agriculture products.

100 million by 2020.

This then results in the soaring price of basic commodities

According to Roshni Wani Thapa at Euromonitor

due to a lack of availability. Add to this 39,000 villages,

International, a larger middle-class will help accelerate

with 52% impoverished, and where the majority of its

consumption growth. “The middle-class can also be

citizens do not have access to electricity or telephone

a strong voice for better governance, provide the tax

lines, means achieving equal infrastructure development

revenues required for the delivery of public services

across the nation is next to impossible.

such as infrastructure, health and education, and start businesses that create jobs,” she says.

Middle-class growth

“The middle class holds the key to unlocking the potential of Indonesia. It is important for the government to support the growth of this group in all fronts. This

I

f a country can expand its middle-class numbers,

includes support to improve quality of education and

this helps boost economic growth and broadens

skills of the population and promoting job-creating

prosperity, according to the World Bank

growth and ample access to social protection. With such

Following a massive reduction in Indonesia’s poverty

support, the middle-class group will grow quickly and

rate in the last two decades, one in every five Indonesians

push this country and region towards a brighter future,”

now belongs to the middle-class group. Another 45%

says Rodrigo A. Chaves, World Bank country director for

are part of an aspiring group who are no longer poor or

Indonesia.

vulnerable to poverty, but have yet to reach the level of

Where's the beef?

economic security and lifestyle of the middle-class.

While 35 percent of the population remains poor or vulnerable to falling into poverty and sustained attention is required to provide them with greater opportunities to escape poverty, expanding the middle-class is consistent with the agenda of poverty reduction.

Today’s middle-class counts at least 52 million people

I

ndonesia’s government launched a beef selfsufficiency program in 2010, with the goal being selfsufficiency by 2014. To achieve this, the government

reduced import quotas on beef and offal products to

whose consumption accounts for 43 percent of total

encourage the growth of local beef and cattle production.

household consumption – some place the number of

Needless to say, the goal wasn’t met, much like previous

middle-class at 74 million. Regardless of which number is

target dates of 2000, 2005, and 2010.

From Java Man to present

commercial Srivijaya naval kingdom flourished in the greater area, which brought Hindu and Buddhist influences to the region.

The earliest evidence of Islamized populations in Indonesia dates to the 13th century in northern Sumatra; other Indonesian areas gradually adopted Islam which became the dominant religion in Java and Sumatra by the end of the 16th century. For the most part, Islam overlaid and mixed with existing cultural and religious influences.

Europeans, such as the Portuguese, arrived in Indonesia from the 16th century seeking to monopolize the sources of valuable nutmeg, cloves, and pepper in Maluku – also known as the Spice Islands. By the early 20th century, Dutch dominance extended to the current boundaries. The Japanese invasion and subsequent occupation in 1942–45 during WWII ended Dutch rule, and encouraged the previously suppressed Indonesian independence

Indonesia’s history has been shaped by its geographic position, its natural resources, a series of human migrations and contacts, wars and conquests, as well as by trade, economics, and politics.

Indonesia is an archipelagic island country stretching along the equator in Southeast Asia, with its name meaning “Indian islands”.

Its strategic sea-lane position fostered interisland and international trade; trade has since fundamentally shaped Indonesian history, with numerous different ethnic groups inhabiting its islands. Current boundaries of the state of Indonesia represent the 20th century borders of the Dutch East Indies.

Fossilized remains of Homo erectus and his tools, known as the ‘Java Man’, suggest the Indonesian archipelago was inhabited at least 1.5 million years ago. From the 7th century CE, the powerful

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With the growing demand in Indonesia for meat/

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additional 85,000 MT imported for Ramadan which ran

poultry due to the middle-class growth, within five years

May-June in 2017. During Ramadan and other Muslim

Indonesia needs to produce a significant amount more

holidays, beef consumption goes up.

chicken and beef than currently available, according to Rabobank's projections.

Indonesia’s protein market is the largest in Southeast

Besides wet markets, Indian buffalo meat is sold in modern hypermarkets and meat shops, as well as being a key ingredient of processed bakso balls (meatballs

Asia, with a promising growth outlook. But to be able

used in a savory soup with noodles which is Indonesia's

to grow, the Indonesian livestock producers need to

national street food).

overcome four critical issues, says Rabobank. These

Indonesia is Australia’s largest destination for live cattle

are: investing in the right value chain; potential impacts

exports. In 2016, 595,950 feeder cattle were shipped

resulting from the adaption of WTO findings and

to the market, down 3% from the previous year, largely

conclusions; compliance with various policies; and global

influenced by strong livestock prices from Australia and

disruptions.

delays in issuing permits in Indonesia.

Rabobank figures show that Indonesia needs to supply

Commonly, Australian cattle are processed after being

4.2 million metric tons (MT) of broiler meat by 2022. This

feedlot-fed in Indonesia for 90 to 120 days. Beef from

is 1.1 million MT more than the 3.1 million MT required

Australian cattle is widely distributed; sold through wet

last year. Annual beef supply will also need to expand

markets, used in manufacturing of the aforementioned

to 914,000 MT by 2022 from 809,000 MT in 2017, mostly

bakso balls, and a small percentage is sold through

through higher imports. Yet, demand could grow faster

modern retail outlets. These products are an integral part

still.

of the market’s beef consumption.

In 2016, Australia was the major supplier of imported beef to Indonesia with a market share of 81%. This was followed by New Zealand (15%) and the USA (4%).

Australia’s grip on the Indonesian market, however, might be weakening.

Last November’s WTO ruling in favor of the USA and

Back in August 2016, the Indonesian government

New Zealand, is expected to open up significant new

approved 10 Indian meat establishments for exports of

export opportunities for US and NZ beef and poultry

frozen, boneless, deglanded buffalo meat to Indonesia.

industries in Indonesian market. This could be a major

Currently, BULOG (National Food Logistic Agency) is the sole importer of Indian buffalo meat into Indonesia.

game changer.

The World Trade Organization (WTO) confirmed that

As at end of December 2016, around 25,000 MT of Indian

Indonesia’s import licensing regimes for meat, poultry and

buffalo meat had been imported into the market, with an

other horticultural and animal products are inconsistent

movement.

Two days after the surrender of Japan in August 1945, nationalist leader, Sukarno, declared independence and became president. The Netherlands tried to reestablish its rule, but a bitter armed and diplomatic struggle ended in December 1949, when in the face of international pressure, the Dutch formally recognized Indonesian independence.

An attempted coup in 1965 led to a violent army-led anti-communist purge in which over half a million people were killed. General Suharto politically outmaneuvered President Sukarno, and became president in March 1968. His New Order administration was favored by the West, whose investment in Indonesia was a major factor in the subsequent three decades of substantial economic growth. In the late 1990s, however, Indonesia was the country hardest hit by the East Asian Financial Crisis, which led to popular protests and Suharto's resignation.

The Reformasi era following Suharto's resignation, which has led to a strengthening of democratic processes, including a regional autonomy program, the secession of East Timor, and the first direct presidential election in 2004.

According to the CIA, current issues include: alleviating poverty, improving education, preventing terrorism, consolidating democracy after four decades of authoritarianism, implementing economic and financial reforms, stemming corruption, reforming the criminal justice system, addressing climate change, and controlling infectious diseases, particularly those of global and regional importance.

In 2005, Indonesia reached a historic peace agreement with armed separatists in Aceh (devastated by the 2004 Boxing Day tsunami), which led to democratic elections in Aceh in December 2006. Indonesia continues to face low intensity armed resistance in Papua by the separatist Free Papua Movement.

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SURVIVAL TIPS Easy-peasy visas Visas are easy to obtain for most, with 30-day visas the most common. If you need up to 60days, you must apply in advance. The 30-day visa is extendable at most major airports. If caught without a valid visa, expect a large fine.

When to go The official rainy season is from October to May when it can rain half of the time. However, there is no month that does not experience some rain.

Tourist season is generally July-August. Jakarta has no tourist season.

Many flights You will have no problem finding a flight to Indonesia from North America or Europe, with most national carriers stopping at their own hub first. Inside Indonesia, always try to take a major carrier over a smaller one. Local safety records are a bit spotty.

Challenging Jakarta Major traffic woes, smog, crime, not pedestrian friendly – and this on a good day. Plan on either hiring a car and driver for your stay, or taking a taxi or ojek (motorcycle taxi) for the shortest of journeys. While it is probably impossible to avoid Jakarta for business, if given a choice of another location/island, take it.

Like a steam room No matter when you go, expect heat and humidly; MPJ cautions that you never underestimate either. Try not to pack too much

with WTO rules.

Since 2012, Indonesia has maintained unjustified and

into your daily schedule. Offices can have their air conditioning set at Arctic level; you’ll be glad you have that suit coat.

Know your place Hierarchy is very important in Indonesian society and a person’s status should be respected at all times. Use titles with a person’s name (Bapak for men, Ibu for women) and use it continuously if the person is of a higher status. This concept is hard to grasp or understand if you haven’t lived in Asia. Just accept it.

Different cultures You will find that many in business are ethnic Chinese and will likely be prompt for meetings and appointments and will expect the same.

However, Indonesians are more flexible, calling it ‘Jam Karet’ – elastic time. Don’t be surprised if who you are meeting is late or doesn’t turn up at all.

Keep it weak Most Indonesians use a gentle grasp when shaking hands. It’s always good, too, to talk in a soft manner.

Business in office Long time expats have told MPJ that business is usually not discussed outside of the office. If invited to a meal, only bring up business if your host does first.

Health woes According to Lonely Planet, between 30-50% of all visitors will get diarrhea within two weeks of starting the trip. Watch what you eat and never drink the tap water

the meat and poultry industry.”

US Meat Export Federation (USMEF) CEO Philip Seng

trade-restrictive licensing regimes for the importation of

says USMEF sees Indonesia as a very promising market

animals, animal products and horticultural products. The

for the future. Although it is the fourth most populous

US products that have been affected by these Indonesian

country in the world, with per capita beef consumption

regimes includes poultry, cattle, beef, other animal

of only 3.4 kg, Indonesia has almost unlimited potential

products, fruits, vegetables, flowers, dried fruits and

to become one of the world’s largest beef importing

vegetables and juices.

countries – if the money is there.

North American Meat Institute president and chief

“WTO’s report sets the stage for expansion of

executive officer Barry Carpenter says, “It was clear that

Indonesia’s beef market. We are excited about the

Indonesia’s restrictive policies were in violation of WTO

opportunity to play a big part in its development by

rules…the Indonesian market is one with great potential for

introducing US beef to a much wider group of Indonesian

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customers,” says Seng.

In 2016, US beef and beef variety meats exports to

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feedlots and processing assets are performing below the required return on capital, according to the Farm Weekly.

Indonesia totaled 10,783 MT, valued at $39.4 million,

The bird

making it the US's ninth-largest export market by volume and 15th-largest by value. Indonesia is currently the third-largest export market for US beef hearts, following Mexico and Hong Kong.

In 2016 Indonesia's Business Competition Supervisory Commission (KPPU) penalized 32 Indonesian cattle importer and beef feedlot companies with a combined

I

ndonesia’s commercial poultry sector has grown significantly since the early 1980s. The Indonesian Feed Producers Association (APPI/GPMT) reports

that the sector supplies 65 percent of Indonesia’s

IDR 107 billion (approx. USD $8.1 million) in fines on

animal protein, providing jobs to 12 million people. The

grounds of the practice of unfair competition.

Indonesian poultry industry’s value is estimated at over

These 32 companies – including Australian mega-

$34 billion and is made up of six sub-sectors: feed,

company Elders –have been found guilty of forming

breeding, broiler farming, layer farming, slaughterhouses,

a cartel with the aim of controlling local beef prices,

and processing.

curtailing beef imports, and curtailing the distribution

According to the USDA Gain Reports, Indonesia’s

of beef at the expense of the Indonesian consumer,

industry is primarily made up of broiler and layer chicken

particularly in the Greater Jakarta area.

farms, but also features duck broilers and layers, quails,

Muhammad Syarkawi, Chairman of the KPPU, said

and local/native broiler and layer chickens in smaller

these illegal actions of Indonesian beef importers are

quantities. Estimates measure Indonesia’s commercial

actually the result of weak government policy. The

chicken flock at 3.5 billion broilers, 200 million layers, and

Indonesian government provides import quotas to a

24.8 million breeders (2015) with 81% of Indonesian poultry

selection of companies that therefore are in a position to

genetics originating from the United States.

more-or-less determine the prices (because in terms of

Indonesia’s poultry farming system is slowly

beef, Indonesia is still highly dependent on imports). In

transitioning from intensive, open-housed system farms

this situation it is very tempting for these companies to

to closed-house, automated housing system farms.

take advantage and curb the amount of imported beef in

This change is the result of increasing poultry market

order to let prices soar.

competitiveness, characterized by increasing labor costs,

In January of this year Elders announced that it might pull completely out of Indonesia after deciding that its

meatpacking.info

the quest for higher yields, and disease pressures such as highly pathogenic avian influenza (HPAI).

May~June 2018

63

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cold

transfer

t e c h n o l og y

Saving the o'zone: The R22 shuffle It’s enough to make you pull your hair out. R22 refrigerant – also known as chlorodifluormethane, difluormonochloromethane, HCF-22, or under the trade name of Freon – is being phased out around the world, with each country’s timetable slightly different. So, is it illegal? Can you still use it? Can you still buy it? MPJ reports.

R

22 is an HCFC (Hydrochlorofluorocarbon)

While the gas was efficient, it had a dark side. When

which has been used for years on the

released into the atmosphere, there was clear-cut

residential side in home air conditioning

evidence that it was contributing to the depletion of the

units and in some car AC units. On the

Earth’s ozone layer. The ozone works as the Earth’s natural

commercial side, its used for packaged

sunscreen. With this layer of protection gone, the Sun’s

air conditioners and heat pumps, chillers, retail food

UV radiation would reach Earth, damaging the DNA of

refrigeration, cold storage warehouses, industrial process

plants and animals. One of the first things we’d notice

refrigeration, and transport refrigeration.

would be skin cancer rates would skyrocket and from

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then things would only get worse.

Since it was agreed internationally in 1987 to phase

Although a quick internet/Ebay search comes up with Chinese sellers of R22 in limited quantities, people have

out ozone depleting substances, all 197 members of the

been arrested and charged in the USA for smuggling R22

UN have ratified the Montreal Protocol, making it the first

into the country. So far there has been no jail time, but

international environmental treaty to achieve complete

fines have been quite steep.

ratification – with action taken, just not words.

While general timelines were given to phase out

With most countries’ requirements similar to the USA’s, MPJ has called on the expert advice of Tim Chapp,

R22, it was assumed that developing countries would

of engineering company Stellar, to clarify and explain

take longer. Australia, which would be one of the first

commercial options.

countries to face serious problems with ozone depletion,

“My understanding on R22 regulation is that R22

has been the leader in the phase out of ozone-depleting

equipment is not being manufactured, and production

substances and is considerably ahead of schedule.

of the chemical is being phased out – but the sale and

Each country’s requirements are slightly different and

purchase of the chemical itself is not prohibited for

MPJ, with limited space, suggests you find out your own.

use in existing equipment,” says Chapp. “It is possible

Even in the USA, some states have different timetables

that someday regulations will prohibit the use of R22

with California having the most stringent. The one

altogether, but this has not been defined. I think that the

aspect that all countries have agreed on is that no new

general idea is that equipment replacement and phase-

equipment can be charged with R22. Where the laws

out of R22 production – and therefore rising R22 costs –

differ is regards to existing equipment. For this, there are

will take care of eliminating its use.

different laws and timetables regarding the use of ‘virgin’

“Similarly, it is generally accepted among our

R22 being allowed for repairs, along with the use of

industry that other high-GWP [Global Warming Potential]

‘reclaimed’ R22, again, for repairs.

refrigerants will be phased out over time, but these dates

Is the law going to be enforced? In India, due to record high temperatures being set every year and life-

are not all currently defined. That said, some of them are defined, with specific SNAP [EPA’s Significant New

threatening levels of air pollution, air conditioning

Alternatives Policy] dates for various industries

has almost become more a necessity of survival

and uses, says Chapp.

for city dwellers as opposed to comfort. According to Forbes, a specialist in international energy at the Lawrence Berkeley National laboratory says India will require as many as 300 new electric power plants in the next 15 years just to handle the demand of air conditioning units. With so many AC units being installed, MPJ has doubts that R22 control

This year signaled the most recent step of the R22 refrigerant phase-out in the United States, according to Chapp, who lists the following dates: u On January 1, 2018, R22 production dropped 30 percent from the 2017 supply to 9 million pounds u On January 1, 2019, production will drop 55

is being addressed.

percent from the 2018

However, India claims

supply to 4 million pounds

to be well ahead of R22 requirements.

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u On January 1, 2020, R22 will be phased out

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completely with no new or imported R22 allowed in the

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Need to know

United States.

Since the supply just dropped at the beginning of this year, that means R22 prices (and repair prices) are

Ammonia refrigeration vs. CO2 refrigeration: Like with

increasing yet again.

anything, there are pros and cons to both of these

If your refrigeration system uses R22, or any other

options, so let’s look at some considerations if you choose

refrigerant with a high Global Warming Potential, you have

to pull the trigger on a full system upgrade.

some decisions to make – and the clock is ticking.

Type of facility/occupancy: While ammonia systems

Sizing the options

are generally safe, they are a slightly higher-risk option compared to CO2 systems. Some owners prefer using ammonia in facilities with less personnel (eg, warehouses) and opt for CO2 and/or cascade systems in facilities with

Do nothing (for now): You can choose to delay any action

greater occupancy. That said, both options are widely

on this matter, but you would simply be delaying the

used and safe overall.

inevitable. If your equipment breaks down after 2020, you

Temperatures in the facility: CO2 performs better at lower

will be forced to replace your system. If your equipment

temperatures, so it’s often selected for facilities with a

breaks down before 2020, you will have to pay a high

lot of low-temp freezers. On the other hand, for other

price for a repair or end up replacing your system anyway.

temperature ranges (eg, facilities with mostly 40-degree

Remember, there are other equipment owners in the

coolers), ammonia systems are generally the efficient and

same boat, all scrambling to get their systems serviced at

cost-effective option.

the same time. For many owners, it is much better to plan

Upfront cost: CO2 operates at higher pressures, so that

for downtime rather than be forced to deal with it when

can make the equipment more expensive, especially for

their system suddenly stops working.

the more complex cascade systems; however, smaller

Retrofit your older system to use another refrigerant: It

bore CO2piping – and subsequently a reduced insulation

may be possible to use an alternate synthetic refrigerant

cost – can make up much of this cost difference.

in your current system, but this is only a short-term

Environmental impact: Generally speaking, both ammonia

solution. The acceptable direct replacement options

and CO2 refrigerants have relatively low environmental

involve refrigerants with GWPs thousands of times higher

impact. Both are highly energy-efficient when optimized

than that of Carbon Dioxide (CO2). Ammonia (NH3), by

for a system. While cooler systems will generally perform

contrast, has a GWP of zero.

better with NH3, ammonia is typically taken from natural

If you choose to switch to another synthetic, you must

gas, so there are some environmental costs from the

factor in the downtime your facility will endure in order to

associated natural gas extraction (this is largely a one-

drain/reclaim your current system of all its refrigerant and

time impact). Since CO2 is a byproduct from other

oil; perform a nitrogen charge to clean out the system;

industries, it’s typically abundant and requires little

and drop in new refrigerant.

environmental trade-off to source. This wide availability

Bear in mind that this won’t be an option for all

also has a favorable impact on its cost.

systems, so you’ll need an inspection to determine if

Packaged refrigeration: Low-charge packaged

this is even possible at your facility. For many owners,

refrigeration is a safe, innovative solution that uses

the period of downtime is such a burden that the only

ammonia or CO2 and a secondary refrigerant (such

reasonable choice is to upgrade to a foresighted solution

as glycol). This allows facilities to reap the benefits of

like ammonia or CO2.

these refrigerants’ excellent thermodynamic properties

A final option is to cross your fingers and hope

while minimizing the refrigerant charge and risk as the

someone will invent a new direct substitute with an

ammonia is isolated to one area and only the secondary

acceptably low GWP. Without evidence of such a

refrigerant is circulated throughout the facility.

possibility, I like to recommend energy efficient, long-

This new type of system is “packaged” or “modular,”

term solutions that minimize a system’s impact on our

with refrigeration equipment built off-site, mounted on a

environment.

structural steel base (or skid), and delivered to your plant

Upgrade your system proactively: If possible, the

as a self-contained, “plug-and-play” system. Because it

ideal, long-term solution is to perform a full system

uses secondary refrigerants, which confines ammonia

replacement and switch to natural refrigerants such as

to the machine room and only uses about one pound of

ammonia (NH3) or carbon dioxide (CO2). Other low-GWP

ammonia per ton of refrigeration, the charge is minimized.

replacement options exist (eg, propane or butane), but are incompatible with industrial facilities due to the large

Packaged refrigeration is just one more option when it comes to upgrading your R22 system.

volumes that would be required.

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Faster freezing in cartons A freezing and chilling tunnel in your plant can mean increase yield, a reduction in labor, and less chance of worker injury.

New Zealand’s Milmeq reports for MPJ

As demand continues to increase, so does the need for reliable machinery that can deliver a continuous performance. With their simple design and few moving parts, the tunnels have proven their value, especially for Dawn Pork and Bacon. A pork producer in Ireland, Dawn Pork and Bacon had a freezing tunnel installed more than

T

10 years ago. Since its installation, the tunnel has required

he ability to efficiently and reliably chill

less than five hours of downtime for maintenance,

and freeze products is one of the essential

according to Milmeq. Production manager Alan Wall says

ingredients for success in the meat

the plant’s throughput continues to be reliable because of

processing industry, according to Milmeq.

the tunnel’s performance.

Carton chilling and freezing tunnels are

As an automated technology, their chilling and freezing

an innovation that was developed by New Zealand-based

tunnels have revolutionized food processing systems by

engineering company Milmeq in the 1970s. Today, the

eliminating labor costs and worker injury risk.

company is the global leading supplier of automatic

Deliberately designed to ease the headache of finding

chilling and freezing tunnels for cartons to the meat,

and retaining reliable labor, no staff are required to either

poultry, and cheese industries worldwide.

load or unload cases to and from the tunnel. All cases, or

A fully automatic operation, the tunnels have a fast chill or freeze which improves shelf life and product quality and is suitable for multiple product types and carton

totes, are conveyed into the tunnel, and then, after being cooled, are conveyed out.

The tunnels employ an air blast-based system that

sizes. The tunnels feature interfacing conveyor systems

provides uniform conditioning to either chill or freeze

for automated loading and unloading, eliminating manual

product. Typical cycle times range from two to 48 hours.

handling and reducing the incidence of injury, while preserving product quality.

Where a Milmeq chilling or freezing tunnel is installed to replace a blast cell freezer, chilling or freezing time

The integrated control system designed for each system delivers complete tracking of all product within the system, which aids inventory control.

As businesses continue to grow and develop, the

is considerably reduced. In addition to lowering the

tunnels can be designed with a plan for future expansion

refrigeration index, the faster cycle time means speed

to be incorporated. The tunnels are manufactured to

to market is increased and less inventory is held on the

meet the client’s specific throughput requirements, but

processing site at any given time.

the capacity is easily expandable by lengthening the

Compared to conventional blast cell freezing, the tunnels provide an estimated 25% reduction in energy

tunnel when required.

The tunnels can be designed to use a variety of

use and physical footprint and its densely packed, vertical

refrigerants to suit site preferences, including CO2 and

design has led to a 50% reduction in building cost. As an

ammonia.

in-line process machine, their first in first out automated

The success of Milmeq carton tunnels has been

system eliminates the need for staggered shifts to

proven with more than 100 installed in food processing

manage the chilling and freezing process.

sites around the world. Recent installations include:

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Banham Poultry

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Milmeq says its system at Banham saves labor costs

Sukame K-based poultry company Banham Poultry Limited approached Milmeq to supply a freezing tunnel to replace an older tunnel from another

provider which was no longer operating reliably and increase its production capacity. With a throughput of

M

exico’s largest beef processor SuKarne was wanting to increase its capacity and expand into international markets and looked to Milmeq’s

6,370 chicken cartons (approximately 16.5 kilograms

tunnels to achieve this. It installed three freezing tunnels

each), the tunnel freezes the cartons from 14°C to -18°C in

and four chilling tunnels in its processing sites across the

24 hours.

country.

Special Projects Manager Bob Waterson said the

Plant Engineering and Design Manager Juan Miguel

tunnel’s reliability and freezing performance were integral

Michel Ezrre says the tunnels are robust and have

to the plant’s ability to produce high quality poultry

increased the plants’ yields.

products.

“We never have any concerns about the product being

“I can honestly say they are fastest and smoothest machines I have ever operated. After the great

frozen in the allocated time. With the tunnel’s automation,

performance and quality of the first tunnel installed, we

we’re able to turn it on and walk away, knowing the

decided to have a Milmeq tunnel in each one of our

tunnel’s performance is highly reliable.”

plants.”

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Stops cooling once 100% frozen is achieved

G

erman company GEA has added a new

Mathieu Nouhin, GEA’s product manager freezing,

freezer to its S-Tec range of spiral freezers

says that there is no point in continuing to cool a product

that has control technology to ensure all

beyond 100% frozen but, until now, there has been no

products are frozen precisely to the users’

way of checking the level of frozenness of products as a

requirements.

continuous part of the process.

Callifreeze takes its name from its ability to calibrate

“Callifreeze uses GEA’s sensing and control technology

the freezer having controlled the level of frozenness of

to measure the level of frozenness of every product in the

the products. This reduces power consumption, improves

spiral,” he says. “It then adjusts the machine to achieve

efficiency and helps manufacturers produce the finest

perfect freezing in line with the customer’s requirements.”

quality frozen food, says GEA. The S-Tec was first introduced to the market in 2016

Nouhin explains that for several applications, 80% level of frozenness at freezer discharge is acceptable with

for poultry, meat, fish, ready meals, bakery and dairy

the product being ‘finish off’ in the cold store for energy

applications that require capacities of up to 6,000 kg/hr. It

savings purpose.

was originally designed primarily for the European market

“The S-Tec with Callifreeze can do this too,” he said.

and conforms to CE and PED regulations. It has now been

Results from one plant operating seven GEA freezers

selected by GEA for sale in Asia.

has showed a 10-15% production capacity increase with a

GEA’s Callifreeze control system is exclusive to GEA spiral freezers. This means it can calibrate the freezer

reduction in energy consumption.

Pure horizontal airflow is a unique feature of GEA

parameters through the continuous measurement of

spiral freezers. This provides a consistent airflow and

the level of frozenness of the product at the freezer exit.

temperature distribution across all products wherever

GEA has enhanced its control system to continuously

they are in the spiral. This consistency, throughout the

monitor the level of crystalized water in the products and

full height of the spiral, ensures that there is a very small

adjust the retention time, air temperature and fan speed

temperature differential within the machine, reducing

to achieve the precise level of freezing required, with the

product dehydration, significantly improving the yield and

minimum of energy consumption.

keeping power usage to a minimum.

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Greek processor modernizes line with freezer

I

t’s not easy being a meat and chicken processor in Greece. At many Greek supermarkets, especially those owned by foreign national companies, you seldom – if ever – see Greek poultry, with instead it coming from Brazil or Holland.

“It is a big challenge for the Greek producers to

compete, because there are many imports and especially from Brazil that are making really low prices for the Greek producers,” Nikos Makelis of NA Makelis Engineering tells MPJ. The engineering company works with various suppliers such as Skaginn 3X, Marel, Fomaco, and Ilpra, to give processing companies what amounts to a-one-stop shop when selecting new equipment for their plants.

Recently, it worked with Skaginn3X and designed a complete custom solution for vertically-integrated Greek poultry producer NITSIAKOS TH AVEE to automatically utilize the by-products coming out of its packing/ processing plant, producing MDM meat and freezing MDM blocks. The quality MDM blocks will then help Nitsiakos open its exporting business which will sell the blocks abroad.

Caption goes here

Nitsiakos has 40-years of experience in Greece, and the company covers the entire poultry process from reproduction, hatching, chicken rearing, slaughtering and processing, with a production of around 120,000 to

These plate freezers are fully automatic and designed

130,000 birds a day. Ninety percent are sold in Greece,

to be loaded on a short time scale with high efficiency

with the remaining 10% sold in various Balkan countries.

and can be placed as an integrated part of a processing

According to Nikos Makelis, Nitsiakos was looking for

line. They come in various sizes and the capacity ranges

a freezer that featured a completely automatic system, along with low energy demands, and a capacity of 75.6

from five to 100 MT per 24 hours.

According to Skaginn 3X, the freezer is made to

metric tons a day. Skaginn3X’s automatic contact freezer

maximize product quality by using patented non-pressure

fit the bill and this is the main reason that Nitsiakos chose

technology, which ensures that the quality equal to that of

Makelis as the supplier for the project.

blast freezing, but requires only a quarter of freezing time

The Skaginn 3X automatic contact freezers are

and energy.

developed from the well-known Samifi freezer. According

“The good thing about the Greek producers is that

to Skaginn 3X, by combining the experience of Samifi and

they are now beginning to utilize as much as possible

the company’s technology, its automatic plate freezer is

from their raw material and are going for solutions with

a state-of-the-art freezer, ideal for bulk production with

further processing and MDM like Nitsiakos did,” says Nikos

premium quality.

Makelis.

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Automate your chilling and freezing operations Milmeq is the global leading supplier of automatic carton chilling and freezing tunnels for the meat industry.

 Fast chill or freeze to preserve product quality and shelf life – typical cycle times range from 2 to 48 hours  Space efficient – approx. 25% smaller physical footprint than a manual blast cell and 50% reduction in building costs

 No labour required for loading or unloading, eliminating the risk of injury through strain  Energy efficient – approx. 25% less energy requirement than a manual blast cell  Reliable, low maintenance design

“Since its installation 10 years ago, our MILMEQ® Tunnel has required less than five hours of shutdown outside of scheduled maintenance.”

ALAN WALL / PRODUCTION MANAGER, DAWN PORK AND BACON

www.milmeq.com Offices in New Zealand and Australia. Partners and installations worldwide.

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belgium

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office

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belgium takes on world A steak on the grill and you think of Texas, Argentina, or even Scotland. But not Belgium. The Belgium Meat Office, however, is out to change this perception, launching in a series of European cities a chance for chefs, supermarket managers, and those in the hospitality industry to see what Belgium Blue is all about. MPJ's editor talks to the team at the BMO.

Belgium is a divided country along language lines between Flemish speakers and French. Is there a difference between the two groups as to which meat they produce and what breeds? Is there a difference in meat preference?

Belgium has always been at the crossing of two cultures since its origin: the Latin-French and the German culture.

This unique position makes that Belgian exporters have a thorough knowledge of and empathy for different civilizations and can easily adapt to them. Regarding pig and cattle breeds, there are no differences between the two regions. The meat business is intermingled and has

by Velo Mitrovich

been investing in developing the Belgian White Blue breed and the Pietrain Landrace breed.

When most people think of food products from Belgium, beer and chocolate comes immediately to mind – not beef or pork. How will the Belgian Meat Office change this perception?

In 2008 that average annual consumption of meat per Belgian was 35kg. It is now 29kg. Is this a worrying trend?

The decrease of meat consumption is a typical trend in a

BMO: Belgian beer and chocolate are well known to

mature meat market. In the Western European countries,

the people because they are luxury products. Beef and

along with the US and Canada, meat consumption is

pork, on the other hand, are convenience products and

falling because of changing eating habits and a more

therefore not immediately top of mind to the public.

sedentary lifestyle. It is a clearly proven fact that meat

Belgian Meat Office targets a business to business public.

consumption is following the evolution of the disposable

Belgium has an excellent reputation among professionals

income of consumers. When the disposable income rises,

because of the specific quality characteristics of Belgian

meat consumption goes up as well until a certain level

meat. Our mission is to convince professional buyers from

of life standard, and then the meat consumption starts to

abroad of that quality – and a good Belgian beer or a

fall again. What we now see in Asia is that the disposable

delicious Belgian chocolate have never hurt the talks!

income is skyrocketing, taking meat consumption with

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Belgium Blue cattle are 'double-muscled', as seen from the cattle (above) and the the hanging beef

it on its flight up. When a certain point of wealth or life standard is reached, people get more concerned about their diet and health and start to eat less and/or with more conscious.

Belgium exports beef/pork to higher end – demanding – markets than the EU as a whole. If Belgium’s top three meat export countries are Germany, Poland and the Netherlands, as opposed to EU28’s – China, Hong Kong, and Japan – Belgium producers have to be doing something right. What sets Belgium meat apart?

Belgian meat has the specific quality that it is lean and has a high yield once you start deboning it. Together with the flexibility and the service of our exporters this sets us apart from the other pork and beef suppliers.

In the UK, the traditional Sunday roast is disappearing. How difficult is it for the Belgian Meat Office to try and estimate correctly how new trends, technologies, and opinions affect meat consumers’ attitudes?

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Rene Maillard, manager BMO

in Flanders because they did not need much space and were close to the harbors where the pig feed arrived by ship. In the Walloon region there was space to grow the feed for the cattle. Producing a better product and be more productive, taking into account the environment, is key for success in the pig and cattle breeding sector.

Three years ago, with much fanfare, Belgium signed an export deal with China. Since then only a few Belgium companies have become accredited to do business there, accounting for only around four percent of Belgium pork exports. With the EU being Belgium’s lead buyer, does the Belgium meat industry actually need China?

To Belgian standards the export figures to China are good. Belgian exporters like to build up stable relations and display the necessary caution when it comes to new customers. In 2017 China was our sixth export destination with 3,5% of the total volume or almost 30.000 tons and it was the first destination in third countries. We need China as an export destination to bring a higher price to the fifth Our marketing department is following the meat

quarter [offal, trotters, tails, etc]. We can sell parts of the

consumption trends, domestic and abroad, in order to

pig in China that we cannot sell here or if we do it is for a

find the right answer. There is an important shift in eating

much lower price.

habits and new product development, combined with diversification of the product range, should ensure that we supply our customers abroad with the right items.

Health issues are pushing the consumers to eat less fat while on the other hand the sales of streaky bacon and spare ribs are on the rise. It is not the first time that consumers have an ambivalent behavior towards meat.

Belgium is about the same size of the US state of Maryland with a population that is nearly twice as large (11.35 million). Add to this congestion is that the denser-populated Flanders region is also home to almost all of Belgium’s pork production – farms, feed mills, slaughterhouses. Can pork production continue to grow in this area?

A 2016 research paper authored by Belgium and Dutch academics stated that Belgium’s pork production has been confronted with stagnating prices since 2000, with poverty widespread in family pig farms due to production costs not met by sale prices. Like elsewhere in the world, will there be fewer, but much larger, farms in Belgium?

In Belgium the sector is professionalizing and industrializing and is thus indeed following the trend towards bigger farms. We have three types of pig farms: breeding pig farms, fattening pig farms and closed-circuit holdings. Breeding pig farms produce piglets and sell them on to fattening pig farms that ensure the fattening of the pigs. Closed-circuit holdings breed pigs and are

You can call it a Flemish miracle that in the urbanized

also responsible for fattening them. Almost half of the

region of Flanders, pig and cattle production still

fattening farm managers are over 50-years-old and do

continues. But, we have been doing it for decades and

not have a successor. Breeding farms are suffering the

it has become a part of the Flemish landscape. There is,

most under the crisis; almost half have financial problems.

however, no space for large scale development so there

These are only a few results from the survey the Ministry

has not been an increase in the number of farms. The

of Agriculture and Fisheries did at the end 2016. The

number of farmers is declining while production remains

general tenor of the survey is that the farmers are not very

stable. Historically the pig farms have found their place

positive about their future.

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The Belgian Pork Group, formed in 2015 after a merger between two major players, produces about 420,000 metric tons of pork meat which is exported to over 50 countries around the world. Are they a major success story or typical of Belgium’s top producers?

office

demand for tender and lean beef. The consumer in Belgium does not want fat but still wants their beef tender and this for a reasonable price. Belgian Blue combines all these requests.

A BMO marketing campaign is centered on ‘Tailormade’ meat cuts. What is this?

In Belgium, almost all pig and cattle slaughterhouses and cutting plants are family owned. This means that more

Belgium is a relatively small country and our meat

time is needed for mergers and acquisitions, certainly

exporters do not have the big volumes neighboring

when compared to our neighboring countries. But to stay

countries have. What, however, sets us apart is our skills.

competitive, we have to follow the trend and in the past

It is important we stress that we can deliver what our

few years consolidation started in the pig sector. The

customer want. We do not have a predetermined menu

Belgian Pork Group is one example. The cooperation

that you have to choose from, but we offer the a la carte

between Noordvlees Van Gool and Vanden Avenne in the

option hence ‘tailor-made’ in our campaign.

brand-new slaughterhouse, Sus Campiniae, is another one. The merger between Debra-Meat and Groep Goossens and the take-over from Exportslachthuis De

Belgian Blue or Black Angus – which one will the true Belgium steak lover choose?

Coster by Groep Danis and their participation in Groep De Brauwer concludes the list for the moment.

During the week, they will undoubtedly choose a Belgian Blue steak but on the weekend, they’ll go for Black Angus.

The majority of all Belgium beef is Belgian Blue cattle which are more heavily muscled than any other breed – actually ‘doubled-muscled’. Is there a premium paid for Belgium Blue?

We have a clear preference for our Belgian Blue steak; it is a domestic product and the traditional choice. However, since we travel a lot and are gastronomically curious, every occasionally, we’ll want to taste a foreign piece of meat. So, during the weekend a true streak lover will want

There is no premium paid for Belgian Blue to the farmers.

to spend some extra money on their steak because they

The breed was and is the answer to the consumers

deserve it after a hard-working week.

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