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

Bloomberg Businessweek (North America) - - Contents -

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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