The inspiration behind Minnesota Certified Pork was conceived from research by Thomas Blaha, DVM and Leman Chair at the University of Minnesota.
Blaha, along with the Minnesota Pork Producers Association, was looking for a way for independent pork producers to position themselves to remain a viable part of the industry.
A decision was made to formalize a producer-owned cooperative with the member-farms operating under standardized production procedures. The cooperative was incorporated July 1999.
Minnesota Certified Pork (MNCEP) is currently seeking membership. President David Starner, Hoffman, and Vice President Jim Quackenbush, Chokio, are two of the founding members.
Each member-farm of the co-op will be required to meet quality standards established by a team from the University of Minnesota. Their quality handbook covers the best production procedures, pre-harvest food safety, environmental stewardship and animal wellbeing that are above mandatory standards.
Each farm involved in the co-op will be required to meet these standard protocols. Eleven farms are involved in a pilot program to implement the standards. At press time, two of the 11 farms had been inspected and started implementing the standards. In the next month, all 11 farms will have the quality standards in place. The Swine Health Center in Morris, MN, will conduct monthly audits of the farms.
The certification for MNCEP will be provided by a third-party, nonprofit corporation to be created by the end of this year. The corporation, Minnesota Certified (MnCERT), will be a partnership between the private sector, the Minnesota Department of Agriculture and the University of Minnesota.
For more information on MNCEP, contact David Starner at (320) 986-2607.
The reality of value-added agricultural projects, including pork ventures, is that 10% of them will have some success, and only 5% will become viable businesses.
"That is not to say there are not opportunities," according to Michael Richard, associate principal for SJH & Co., Danvers, MA. "There are significant opportunities to do pork better."
SJH & Co. completes business plans and feasibility studies for producer-owned cooperatives. The company does from 10 to 25 studies annually. Two to four studies a year are pork-related.
There are several keys to success for producer groups:
* Hiring the people who have expertise in marketing helps producers succeed, Richard says.
* Producers need to have their own production and finances in order. Investment in a value-added venture cannot make up for inadequate production levels or a high cost of production.
* One-half of a venture's success relates to marketing, relates Richard. SJH officials interview key retail buyers, talk to competitors and interview consumers to determine markets.
"There is no better way of discovering what a market is than talking to the people who make the buying decision," he says. "The groups that realize they need help with marketing are more likely to be successful."
Questions To Ask Before producers jump into a value-added or cooperative venture, they need to ask and get satisfactory answers to many questions. Erlin Weness, University of Minnesota Extension farm management specialist, warns that facts, rather than 'co-op fever' need to guide decisions. Weness lists these questions to ask:
* Does the product exist? If so, will your product be competitive? Is there more than one product, and therefore diversified risk?
* Are profit and return projections realistic and positive? Are returns on investment enough to pay back interest plus principal in a reasonable time?
* What added financial and liability risk will this add to your business? How much financial liability do you have beyond your original investment?
* Does the company have contracts signed with buyers? Are contracts written so all parties can understand obligations and commitments as well as termination options?
* Did an independent consultant with an excellent track record do the feasibility study?
* Do you completely understand the business organizational structure, and its tax and legal implications?
* Is the board of directors a diversified group of independent thinkers and business people?
* What is the worst-case scenario? How much money can you lose if you enter this venture and it fails?
* Is the management team competent? Do they have previous experience and success?
* Are the promoters of the project investing and taking risk, or are they just seeking outside capital funding to secure a plant to operate?
"If you can get satisfactory answers to these questions, the odds for success are in your favor," Weness says.