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Best of NAMA 2023

You might call Seaboard Farms, Inc., "the new kid on the block" in the U.S. pork industry. A wholly-owned subsidiary of the long-established and publicly traded Seaboard Corporaton, this vertically-integrated pork entity was just a gleam in the parent company’s eye a mere ten years ago. Now it ranks as one of the nation’s top ten pork producers and processors, according to the National Pork Producers Council (NPPC). The firm is confident that as a percentage of its total sales dollars or volume, it ranks as the top U.S. pork exporter.

Terry Holton, Seaboard Farms’ senior vice president of sales and marketing, believes the firm ranks second nationally (behind Smithfield Foods) in live animal production with some 175,000 sows. Relative to processing capacity, Seaboard ranks seventh.

Seaboard Farms’ 440,000-square-foot state-of-the-art processing facility in Guymon, Okla., just opened in 1995. It has operated at full capacity since 1997, processing slightly more than four million hogs annually. Projections for this year include more than three million hogs produced on company-owned farms, with the remaining one million produced by a handful of contractors in Oklahoma, Texas, Colorado and Kansas.

"We work with a few contractors to provide flexibility in our daily slaughtercapacity, yet control the type, size and consistency of hogs available," Holton mentions.


Seaboard Farms offers a full line of fresh and value-added pork products in the U.S. "We can find a home for our products in the United States," says Duke Sand, Seaboard Farms’ vice president of export sales, "but we can add value by modifying them to suit the needs and desires of consumers in other countries."

Seaboard Farms has achieved tremendous success with its export marketing efforts in Japan, Mexico and Korea. Currently, sales to these countries account for more than 70 percent of Seaboard Farms’ annual pork exports. Exports run 20 percent to 30 percent of the firm’s total meat sales.

"It’s common for U.S. beef and pork packers to look to Japan as an export client," Sand begins. "The Japanese look for recognized quality in the meat they purchase, and we challenged ourselves to meet their needs. We looked at other potential customers that might be the best fit for our company. We wanted customers who cared about the end quality of the product and what we were trying to do to serve their specific needs.

"Korea and Mexico use slightly different products than the U.S. and Japan, but they also will pay a premium for products modified to their unique specifications," Sand continues. "There are different specifications that define quality in nearly every country we sell to, therefore we have designed processing lines that are dedicated solely to the production of these specialty products for our foreign customers."

The Japanese request firm textured pork products, which also adhere to a strict color standard in regards to both the meat and fat. Firm texture is extremely important for one of the more popular Japanese meals called Shabu Shabu. For this dish, the loin is sliced paper-thin and dipped into boiling water with vegetables. If the meat texture is too soft, it will not slice well, thereby detracting from the eating experience.

Mexicans savor hams, plus variety meats like tongues, stomachs and skins. Koreans make their special barbecue at a table with a built in grill. The meat and vegetables are cooked by each diner according to individual preference. For this Korean favorite, Seaboard Farms supplies a product known as "single rib belly" which is pork belly with the sparerib meat left attached and the bones individually removed.


Seaboard Farms’ alters procedures according to customer feedback and changing needs. For example, working with export customers, the Seaboard Farms team might decide to alter the nutritional profile of the hog feed to enhance specific meat characteristics, and they might also change processing or meat packaging methods to comply with a customer’s specific needs.

When Seaboard Farms designed its plant, the company already had export markets in mind, says Sand. "Even before we had identified any specific countries as target markets, we knew we had to design our cutting floor for flexibility and automation to provide for unique and consistent products."

So intent was Seaboard Farms on catering to international clients, the developers traveled around the world in search of plant design and marketing ideas. "Our staff polled existing foreign contacts and potential clients for advice," Sand elaborates. "We invited people from a variety of countries and backgrounds to visit our site and make recommendations. We paid attention to every detail and our plant blueprint was modified several times before the facility was built," Sand adds.


To develop and fine-tune their international marketing program, Seaboard personnel took advantage of several organizations’ services, including state departments of agriculture, the NPPC and the U.S. Meat Export Federation (USMEF).

"Seaboard is creating a niche by being a customer-driven company," says Phillip Seng, USMEF’s president and CEO. "Seaboard is producing pork that is tailor-made to individual customers’ specs, and is doing that consistently."

That’s a good thing, because foreign customers’ purchasing habits have changed dramatically in recent years. During the 1970s, Seng explains, the Japanese were interested in simply procuring meat products. During the 1980s and 1990s, they looked for quality and safety in the meat they purchased.

"Today Japan and customers throughout the world want specificity," Seng points out. "As people become more concerned about food safety, diet and health issues, they want a product that can be source verified. They are not just purchasing U.S. pork or beef or poultry. Many foreign buyers are not product or commodity driven, but brand driven."

Seaboard really understands those buyers’ needs, Seng emphasizes. "Their needs are eclectic, they’re different," he relates. "The company is willing and able to produce a specific product for a specific customer. We call that prescription pork, or designer pork."

Another major secret to Seaboard Farms’ success is involving the customer in the entire meat production process. "Customers worldwide are not just buying a pig, but rather they know what breed it is, and details about its genetic lines, diet, husbandry and how it was processed," Seng says. "That creates tremendous confidence in the company."

"What Seaboard is doing is simple but different," adds John Cravens, NPPC’s director of foreign market development and world trade. Cravens describes pork exporters as those that sell value-added products and those that sell pork mostly as a commodity. Regarding value-added specialists, he ranks Seaboard as one of the top pork producing firms in this country. "They ask the customers what they want, and the beauty of their integrated system is that they provide just that. They provide a model we want to repeat among independent pork producers."

Seaboard has been successful with Japan, Korea and Mexico because, Cravens says, those countries are rapidly evolving from cultures that feature many small butcher shops to places where large Western-style super market chains are abundant. "Retailers are expanding aggressively, and are working directly with U.S. and other foreign packers," Cravens points out.


In 1999, according to the USDA, the U.S. exported 553,817 metric tons of pork, including variety meats, valued at $1.197 billion. The U.S. MEF projects 2000 exports to total 552,000 metric tons, increasing to 988,000 metric tons by 2006. In the long-term, the U.S. is poised to increase export sales throughout the world, Sand agrees. Other countries have issues that will stand in the way of expanding or even maintaining current pork production. Taiwan, for example, had a bout with foot and mouth disease (FMD) in March 1997, which devastated its pork industry. In March of this year Korea had a less serious FMD outbreak in cattle, but the disease jeopardized its hog industry as well.

In addition to disease control, production efficiency and availability of feed will stand in the way for some countries to increase production. Many countries barely have enough water for their people let alone enough to grow feed to raise livestock. Even China, the largest producer and consumer of approximately 50 percent of the pork consumed in the world each year, will find it more efficient to import pork than to import grain to feed hogs.

The Chinese market has the potential to be a great export opportunity for U.S. pork producers. Dermot Hayes, an Iowa State University economist, projects that the Chinese market, if fully opened to U.S. pork variety meats, would add about $5 per head to each of the 100 million hogs that are slaughtered in the U.S. each year.

"In the upcoming years, there will be a nearly unlimited potential for U.S. pork producers to export their product," Sand believes. "At Seaboard, we are excited about the opportunities. Success lies in our ability to get access to new markets and our willingness to respond to the needs and wants of foreign markets."

Energized by this perceived potential, Seaboard has plans to establish a second vertically-integrated pork operation in the next few years. While the base location is yet undecided, it will probably be in the Midwest, Sand mentions.

There will be shifts in both domestic and international pork production in the next five to ten years, Sand expects. "Live hog production domestically has to be more involved in the marketing chain," he says. Internationally it will include the issues mentioned earlier, namely availability of natural resources like water and land, as well as a political climate that values the economic role of agriculture.

U.S. opportunities to export pork rest on two variables, Cravens adds. "Pork is the meat of choice internationally, accounting for 41 percent of the meat protein consumed in the world," he says. "Secondly, annual gross domestic product is growing by some 3 percent around the world. People in underdeveloped countries are eating better all the time, adding meat to their diet, especially pork."

The pork industries that will grow internationally are those that will overcome constraints like market access and environmental issues, Cravens mentions. "In the U.S., we’ll solve both of those problems, and our pork markets will continue to expand because we’ve already got the infrastructure, capitol, safety and quality issues worked out," Cravens says, adding that traditional producers of pork, like Denmark and Holland, may not continue to be pork powerhouses in the future.

Sand concurs: "The U.S. pork industry now operates in a global economy. The sooner we recognize that our competition and customers exist beyond the boundaries of our own country, the better position we will be in to capitalize on our country’s inherent advantage in agricultural production to best satisfy the needs and preferences of the world’s consumers." AM


Freelance writer, Linda L. Leake, follows the international marketing scene from her home base in Wilmington, N.C.

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