Processor looks to future with Perdue Foods
By JOLENE STEVENS
SIOUX CENTER – There’s a new kid on the block in northwest Iowa’s pork industry.
Perdue Foods, a third-generation livestock and poultry company founded in 1920 in Salisbury, Maryland, completed its purchase in late September of Natural Food Holdings, in Sioux Center.
Included in the purchase are the Sioux Center and Sioux City pork operations as well as the SiouxPreme, Niman Ranch and Prairie Hill Farms brands of natural antibiotic and organic meat products.
Gary Malenke, president and chief executive officer for NFH, said the purchase agreement closed in September provides for the three brands to operate under the umbrella of Natural Food Holdings and remain the same for a six-year period.
“Our strategy operationally for our existing plants,” Malenke said, “will remain the same at all our locations including the harvesting plant here in Sioux Center and fabrication (breaking carcasses into primal cuts) in Sioux City.
“We’re continuing to grow pork products for natural, organic and antibiotic-free markets and the specialty niche markets we’ve worked hard on the last 15 years and to even build further on these markets.”
As to what the change means to current producers Malenka said he would expect that long term it will provide additional opportunities for producers to get into niche production programs.
“Generally speaking,” he said, “producers, recognizing the commodity markets aren’t right for everybody, want to know how to keep themselves competitive.
“There are two mind sets out there. One is that this (natural, antibiotics free or organic) is the way production can be done. Two, this approach to production is a niche they can fit in to divert a little bit of risk and be a better way to turn their own operation around.
“We look at it from a plant perspective, that it’s all about choices., we look at it from a plant perspective as it’s all about choices.”
He said a program protocol exists with a producer deciding if he can follow the procedure.
“We’re not here to say that one brand is better than another,” Malenke said. ” At the same time consumers have different expectations, and we build our market as we see those expectations.
“I would expect the programs continue to grow but by the same token, is it possible these niches will feed the world? Probably not in the foreseeable future, but they will certainly move upward from where they are today.”
Malenka said there are “value-added” markets in nearly every U.S. state, plus in Mexico, Canada, Japan and, to a degree, in China, where markets have been what he termed a bit closed to the U.S. for approximately a year.
He said he sees the Trans-Pacific Partnership trade agreement backed by President Obama and now in the hands of Congress is definitely helping future exports.
“A lot of work has been done by the USDA, National Pork Producers and others in the industry to get export challenges opened up so that market access can be gained in time and proceed uninterrupted.
“Our U.S. producers continue to be the lowest cost pork producers in the world,” Malenke said. “As long as we hold this stake and can get free market access to more of the world’s population, we’ll be in a great position with a great worldwide demand position.”
Malenka said domestic markets points to the success for almost 20 years of the Niman Ranch niche market products.
These are going into retail market carts at stores such as Whole Foods or on to white-cloth restaurant tables on both the East and West coasts, plus restaurants in major cities such as Denver, Dallas, Atlanta, New York City and Chicago.
Asked if Perdue’s recent purchase could single future expansion plans for either of the northwest Iowa locations, Malenka said, “The purchase will definitely help to take our company to another level long-term.
“It could definitely be looked at as a possibility.”
The U.S. hog inventory is showing growth, Malenke said. It’s a controlled growth rather than going full steam ahead, not flooding the market and get themselves in a deep dive of losses
“They’re getting more sophisticated,” he said, “more knowledgeable and making better decisions today than they ever have.”
What’s more, he said pork products are available at reasonable prices in comparison for those for beef.
Not surprisingly he points to pulled pork and bacon as two of today’s products which have taken off strong in consumer markets due to what he described as their robust rich flavor.
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