NPB 2013 budget reflects market challenges
DES MOINES – More than 50 pork producers from the Plan of Work Task Force plan to meet in Des Moines Sept. 5-6 – in the midst of some of the most difficult market conditions in years – to draft a 2013 budget for the National Pork Board (NPB) that will focus on building demand for pork plus address challenging production issues.
The task force will continue a planning and budgeting process that began earlier this summer when producer-led committees identified specific action steps designed to meet the goals in the board's strategic plan. Goals include refreshing and repositioning pork's image to increase domestic and international consumer demand; protect the rights and ability of US farmers to produce pork in a socially-responsible and cost-competitive manner; and pursue strategies to enable US pork producers to remain highly competitive, long-term, on a global basis.
The board has established a budget target of $67 million, which is approximately 5 percent below the 2012 budget, based on revenue projections from the Pork Checkoff in 2013. Revenue forecasts are lower due to projections that hog prices will be slightly lower in 2013 than they were in 2012. NPB revenues come from the Pork Checkoff, which collects 0.4 percent of the sale price when a hog is marketed.
The impact the widespread drought will have on the 2013 hog market will be on the minds of the producers working on this year's budget, said Conley Nelson, NPB president. "We expect to see relatively good market prices for our pigs, but the drought has significantly depleted the corn and soybean crops that are the foundation of hog diets,” he added. “As a result, we're going to have feed and other costs that will make it difficult for most producers to be profitable in 2013.”
The challenge in putting together the next budget is to continue to support the successful, new Pork Be Inspired marketing campaign and growing export markets, while doing everything possible to help pork producers prosper under difficult conditions, he added.
“There also are proposals in the budget for important research projects, and the board believes we must continue to support the industry's We Care initiative and other efforts to build consumer trust,” Nelson said.
"We have to do all that with a slightly smaller budget than our current one,” he continued.
Producer committees overseeing foreign and domestic marketing, science and technology plus producer education and services each make budget requests for specific tactics. The task force will be asked to align the committees' spending requests with the board's budget target.
The last step in the 2013 budgeting process is scheduled for November, when the NPB meets to review the Task Force recommendations. The US Department of Agriculture has final budget approval.
The board is also expected to review its efforts to build stronger relationships with its food channel partners; review its policy on maintaining reserve funds in the budget and discuss the possibility of revising its Environmental Stewards Awards program.