Bloomberg Businessweek (North America)

Pigs Fly

At Whiteshire Hamroc: Clayton (left) discusses various types of pigs with Chen; Jessica Weirick, a farrowing manager (above right), processes a newborn piglet

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U.S. sows head for the Philippine­s to plump up pork output

h ree hundred thirteen- five is a beauty and sure to have beautiful babes, too. Born on March 30, the fifth piglet in litter 313, she’s an elite sow, bred to produce several generation­s of breeding pigs that will ultimately produce delicious piglets—a lot of them. She’s a Yorkshire, a breed known for strong maternal traits, such as the size of their litters, the birth weight of their piglets, and a relatively short interval between litters. The best ones grow up fast and also produce lean meat.

Even among Yorkshires, though, 313-5 comes from exceptiona­l stock. Her father, a boar with the romantic name BTI4 the Unit 30-6, was ranked, as of Dec. 15, sixth in the U. S. among Yorkshires on the “sow productivi­ty index,” a measure of maternal traits, and fourth on the “maternal line index,” which combines maternal traits with edible traits, such as stores of back fat and muscle. Her mother is a descendant of the late Wisconsin Steel, the champion boar at the 2009 Wisconsin State Fair; the name is a play on the relatively cheap price, $2,500, paid for the boar—a “steal” for such a productive stud. In short, 313-5, her children, and even her grandchild­ren will be bred to breed and enhance a widening gene pool. Her great- grandchild­ren, though, will be raised for slaughter. And though she doesn’t know it yet, she’s going global. She’s headed to the Philippine­s.

One evening in May, several men weighing 313- 5’ s fate gather in a conference room in rural Albion, Ind., for a sales presentati­on on a “customizab­le approach to genetic improvemen­t.” The room is in the basement of Whiteshire Hamroc, a 20-year-old company that specialize­s in swine genetics, the porcine equivalent of rose breeders crossing hybrids to yield a singular flower. A map of China adorns one wall, and framed aerial photograph­s of Whiteshire Hamroc’s farm hang on the others.

Mark Brubaker, an applied geneticist, works through a Powerpoint presentati­on that rates the farm’s pigs with statistica­l precision—feed-conversion ratio, estimated breeding value, terminal sire index. He boasts that the data paint a picture of “pounds of pork through a system,” and “how efficient that system is.” But don’t get the wrong idea. These are animals, not pounds of pork, adds Scott Lawrence, director of domestic sales and marketing. “Our philosophy is: How can we advocate for the pigs?”

Edwin Chen listens attentivel­y, interrupti­ng occasional­ly to parse the data. “The yield is with the head on or the head off?” he asks. (Head on.)

Chen is a slight 55-year-old with neatly parted black hair and wire-rim glasses. As president of Hypig Genetics, he oversees a 6,000-sow operation on several farms in the Philippine countrysid­e. He wants to triple that number, in part by buying thoroughbr­ed pigs from the U.S., where he says swine genetics is decades ahead of that in the Philippine­s. Chen says his family’s desire to expand quickly is based on potential as much as current demand. The gross domestic product per capita in the Philippine­s is about $2,900 a year. When it reaches $5,000, Chen predicts, demand for meat will explode. “We have to get ready,” he says.

Chen has come to Albion as Tony Clayton’s guest. Clayton, the president and owner of Clayton Agri-marketing, is a paunchy 55-year- old in jeans and a blue, short- sleeved button- down shirt with his company’s name on the breast pocket. He ships breeding livestock around the world, a business that’s booming because of growing demand for meat and milk in the developing world. Clayton converts pounds to kilograms for Chen and remarks on the value of different metrics for measuring the worth of a particular pig. After a lunch of cold cuts (including ham), chips, and cookies, Clayton and Chen climb into biohazard suits and bootees and enter a barnyard showroom. Standing behind a glass partition overlookin­g a livestock pen, they critique one group of pigs after another as the animals trundle in for inspection.

“I like a pig that when you walk in the room, it’s like, ‘Brrrr!’ ” Clayton says, using a shorthand to recommend frisky pigs, part of a running commentary. “I don’t like a deadheaded pig. I like a big, athletic pig.”

Chen, snapping a few pictures, doesn’t say much. At one point, he asks to see pigs with broader shoulders. Those tend to be meatier. Admiring a group of rust- colored gilts, the term for young females, he says, “Good vulva size.”

At the end of his tour of Whiteshire Hamroc, however, Chen doesn’t buy any pigs. “You don’t just buy animals,” he says. “You buy genetic progress.”

He visits three more Midwestern farms—in Illinois, Nebraska, and Iowa— as well as the World Pork Expo in Des Moines, before directing Clayton to purchase 230 pigs: 35 boars and 195 gilts. Of those, 86 come from Whiteshire Hamroc’s Indiana farm,

including pig 313-5, which costs Chen $1,485, including shipping and handling. He expects 313-5 to be near the top of a production pyramid, multiplyin­g its U.S. genetics through his herd.

On a night in July, a little more than a month after Chen’s Indiana tour, 313-5 arrives at a warehouse adjacent to Chicago O’hare Internatio­nal Airport. She’s asleep in the back of a tractor-trailer, flopped in a pile of slumbering swine, all about her age and weighing 110 pounds or so. The temperatur­e is about 60F—“perfect pig weather,” says Clayton, who’s waiting near a loading dock in overalls, a cap, and plastic bootees.

Before 313-5 made it to the warehouse, she passed a battery of tests to ensure she was free of diseases. Then she spent a day at a quarantine facility on Chicago’s outskirts, where government inspectors made last-minute checks. Rousted from sleep, 313-5 and the others straggle and squeal as they’re led out the back of the truck. Clayton and his crew use plastic paddles to direct the animals into wooden crates about 10 feet long, 8 feet wide, and 10 feet high. The crate carrying 313-5 is divided into three levels, each with wood shavings on the floor and a pipe filled with water and electrolyt­es to keep the pigs hydrated. There are about 17 pigs per floor.

Over the next four and a half hours, Clayton oversees the unloading of 655 pigs belonging to 15 customers in the Philippine­s. The swine are separated by size and customer; the orders range from Chen’s 230 pigs to just one. Six boars, a few months older and bigger than the other animals, are put in a separate compartmen­t, “so it doesn’t turn into a prison shower scene,” Clayton says.

Fourteen crates are loaded with pigs, and customers’ names are stapled to the side of each one; the paper affixed to 313-5’s says “Hypig,” the name of Chen’s company. A forklift settles each container onto a flatbed truck for the short drive to the tarmac at O’hare. There, one by one, the crates are carefully loaded onto the main deck of a Boeing 747 cargo jet bound for the Philippine­s.

Clayton’s gotten pretty good at this over the past five years, his busiest since he started his company in 1996. A native of southwest Missouri, he aspired to take over his family’s farm, but a weak economy led him elsewhere, as a hog buyer, an auctioneer, and a bureaucrat at the Missouri Department of Agricultur­e. In his two decades as a livestock exporter, Clayton says demand from developing markets has come to represent about 70 percent of his business. In the past year, Clayton has flown pigs to Britain, China, South Korea, Malaysia, and Vietnam, as well as the Philippine­s. He also sent pig semen to Colombia, Mexico, and Ukraine

and his first shipment of dairy cows to Sudan and Vietnam, both by boat. (Pigs don’t travel well by boat because of the voluminous quantity and ammonia content of their waste.)

“I can throw a dart at a map right now, and there’s something going on,” says Clayton, who says he was on the road more than 200 nights in 2015. “It’s like Brad Paisley’s line in Welcome to the Future: ‘Wherever we were going, well we’re here.’ ”

Clayton’s recent run of success reflects a fundamenta­l change not only in diets but also in farming methods in much of the developing world. A growing middle

Unloading a crate of pigs at a former U.S. military base in Pampanga, Philippine­s (above); one makes a break for it. The Cavite

Pig City pen, outside Metro Manila (right)

class is spending its extra money to buy more meat, eggs, and milk. To meet the demand, traditiona­l backyard- style farms in places such as the Philippine­s are losing market share to larger, more industrial operations, the kind snubbed by American critics as “factory farms.”

Buying elite DNA— either frozen or chilled semen, frozen embryos or live animals— is a logical next step, jumpstarti­ng a process that normally takes decades of selective breeding. It’s the farm equivalent of upgrading software or technology, betting that the longterm gains outweigh the short- term costs. The animal genetics industry, valued at $ 2.5 billion, is expected to increase an average 9 percent per year through the end of the decade, fueled by growing meat and dairy consumptio­n and improved breeding technology, according to Marketsand­markets, a research firm.

Clayton’s business is fraught with financial risks and potential catastroph­es. Exporters must navigate countries’ various regulation­s, financing arrangemen­ts, and cultural norms. Animal diseases, currency fluctuatio­ns, and politics can quickly destroy markets.

“When it’s all said and done, most people get tired and just can’t stand that level of risk,” says Jay Truitt, executive director of the Livestock Exporters Associatio­n, who estimates Clayton has a half- dozen head-to-head competitor­s. A few dozen more focus on one species or country.

Oscar Kennedy, a Virginian who retired from the business last year, says shipping livestock by plane didn’t become a viable commercial enterprise until the late 1970s or so, driven by demand in Eastern Europe. In those early days, he says, he struggled to persuade his clients to properly secure the animals once a plane landed.

In one instance, a dairy cow got loose in Belgrade and crashed through the window of an airport restaurant at lunchtime. In another, a Texas rancher shipped four American buffaloes with a shipment of livestock to Hungary, but the animals burst out of their crates while the plane was being unloaded. “I think only one survived,” Kennedy says.

Clayton has his own war stories. Last year the air conditioni­ng malfunctio­ned on a plane full of pigs headed to the Philippine­s. Before long, the pigs started “screaming and going crazy,” and the windows of the plane, including those in the cockpit,

fogged over as the plane heated up. “Everybody was nervous,” Clayton says. “It got concerning enough that we were looking for a place to get the plane on the ground as quickly as we could.” It landed safely in Manila.

As the 747 lifts off from Chicago for a 17-hour flight, 313-5 settles in to sleep. The plane lights are kept dim, and the temperatur­e is a cool, pig-friendly 55F. Clayton rides along with the pigs, making sure the air conditioni­ng doesn’t conk out again, and eventually tries to catch some sleep in the upper deck. He occasional­ly reads a book called Spillover: Animal Infections and the Next Human Pandemic.

When 313-5 arrives in the Philippine­s, it’s dusk and a deep blue sky looms over the remains of a sweltering day. Every pig survives the flight, and the crates are slowly lifted onto the tarmac of a former U. S. Air Force base an hour and a half north of Manila, surrounded by rolling tropical hills. There are rain clouds overhead, and the temperatur­e is 30 degrees warmer, the air vastly more humid. It’s not perfect pig weather.

Farmworker­s wait outside the gate, on idling pickup trucks and livestock carriers, as the plane taxis to a stop. They eat watermelon and share fried chicken from a local Jollibee, a Philippine fast-food chain.

The crates are unloaded one after another, then pulled on a cart across the tarmac to a waiting area and cleared by Filipino authoritie­s. Once the containers are pulled outside the gate, workers pounce, spraying water onto them and tossing ice and watermelon inside to cool off the pigs. Others climb on top and begin cutting away the netting that secures the crates to aluminum pallets on the airplane. Clayton stands amid the commotion in a sweat- stained plaid shirt, jeans, and cap, checking identifica­tion numbers against the packing list to make sure his clients get the right pigs.

The farmers with smaller orders create makeshift ramps and prod the animals toward their trucks; some even climb into the crates and drag the pigs out by hind leg or ear. Among them is Jeffrey Sarmiento, who drove two hours from his farm to pick up his order— one Landrace boar from Waldo Farms in Nebraska, ear notch 148-1.

Sarmiento, who has a 250-sow farm, says he’d previously purchased the progeny of a Waldo Farms pig, and “the results were amazing.” So this time he decided to invest in his own American

Butchering a pig at Parañaque Meat Processing & Slaughterh­ouse (above).

Bacon on display (above right) at SM Markets in Manila (bottom right)

pig. Based on estimates that his stud will produce piglets that grow quickly and require less feed, he says, “I am assured that I am getting my money’s worth.”

Bigger customers such as Chen use forklifts to heave the crates onto flatbed trucks. In the process, one of Chen’s pigs escapes, a Whiteshire Hamroc gilt, 295-6. Several workers chase the animal back into its carrier, and before long the trucks drive off into the Philippine darkness. Two and a half hours later, 313-5 arrives at her new home, Macapagal Farm in Bulacan province, in a lush valley with the Sierra Madre Mountains as a backdrop.

Eight weeks later, 313- 5 is lounging with nine other gilts in an indoor pen. Now 5 feet long and a muscular 236 pounds, she spends 19 hours a day snoozing, one way of acclimatin­g to the steamy conditions.

“We expect 313- 5 to be a good breeder, given her good genetics,” says Filip Madelozo, Chen’s production manager, admiring the pig’s lean physique. “If she can farrow 12 to 14 pigs, that would be good.”

The leisurely lifestyle doesn’t last. On Sept. 10 the gilt is shipped to another of Chen’s farms, where she’ll spend the rest of her life producing piglets, preferably a litter about every five months. By November she weighs 355 pounds and is impregnate­d with a plastic tube of semen. The donor? A handsome Indiana stud named Zook 383-11, the top-performing Yorkshire male in Whiteshire Hamroc’s herd, says company president Rebecca Schroeder. A batch of his semen was flown to Chen’s farm in November. “Another level of online dating,” Clayton quips.

If all goes as planned, 313-5 could have her first babies in March. “Her present status today is presumed pregnant,” says Madelozo, who planned a confirmati­on test on Christmas Eve. “We’re just hoping she conceives.” <BW> � With Norman Aquino and Philip Montgomery

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