For the past 12 years I have been researching the idea of building a pig meat industry in Alaska. I thank you for the opportunity to provide the public with information about this project, which has been named the Alaska Pork Project.
The approximate investment cost of the Alaska Pork Project is $232 million. It will gross $300 million per year paying a 26 percent return on investment. The Alaska Pork Project will create 460 new full-time industrial jobs with benefits. Support jobs will be created as a result of those created in the Alaska Pork Project. The employment impact will be approximately $40 million per year into the local economies. The estimated borough tax revenue will be $2.94 million annually.
To better understand the project it is important to know that pork production is an industry with strong international trade and competition. The market is asking for safe pork produced in an environmentally friendly manner with animal welfare in mind.
For farmers to be successful in the pork industry today, it is crucial that they be able to access the technological resources necessary for this business. Their operation must be market oriented and have the ability to accommodate to changing customer demands, fluctuation in market prices, and new industry developments.
Most farmers are not able to acquire these resources on an individual basis. As a result, small family farms cannot be competitive without cooperating in a larger network that can facilitate quality production and marketing of a value-added labeled product.
The Alaska Pork Project recognizes what is happening to the small family producer and will therefore offer a franchise system. The Alaska Pork Franchise will participate by investing approximately 10 percent of the capital for the farms. The farmers, in turn, will own shares in the holding, breeding, feed and meat company.
Most advocates of competitive, entrepreneurial agriculture have identified vertical "coordination" as a very competitive structure that allows distributed ownership and risk management. It has been stated that this business configuration may well be more sustainable than the corporate model.
I am also concerned about the environment and, as a result, have taken steps to institute into the Alaska Pork Project new industry technology and standards for handling the waste, odor and conserving water. Land application is an important alternative for hog manure use (organic fertilizer). Soil injection is a mechanical process that places manure directly under the soil surface, so the nutrients can be better used by the cover crop. Injection or "knifing" manure is the most effective way to reduce odor when applying to crops. Using a commercial waste treatment facility to treat the waste is also being considered. To conserve the water, we are looking into treating the water so that it can be used again either for consumption or cleaning.
The packing-processing plant will incorporate all necessary standards for operation, including a biotech filtering system for air quality. The Alaska Pork Project will have to obtain permits and therefore be required to meet certain federal Environmental Protection Agency and Alaska Department of Environmental Conservation standards for both the farms and packing-processing facility. Both of these agencies have been contacted and information has been distributed to those within the loop. I assure you that the Alaska Pork Project will be in compliance with every ordinance of either agency.
Alaska at this time has no swine diseases and the Alaska Pork Project wants to keep it that way. All the livestock coming to Alaska for this project will have to pass through quarantine. Once the livestock arrives and is transported to the farms, the veterinarians and their staffs will be responsible for the health of the herd. With constant monitoring of the herds' health, the lack of contact from outside sources and the quarantine requirement, swine diseases should remain non-existent. The herd health standards that will govern the Alaska Pork Project will be such that no deceased livestock will be allowed to remain on the premises. This standard is necessary to avoid jeopardizing the health of the other animals.
There are several Dutch companies that have indicated an interest in coming to Alaska to participate as partners in the Alaska Pork Project. Though their financial participation will come later, they will be actively involved in creating the feasibility study-business plan. Their participation in the project offers opportunities that make us more than competitive with other pork producing areas.
Cefetra is the largest grain importer and feed manufacturing company in the Netherlands and one of the largest in northern and western Europe. This company will allow us to source feeds literally from anywhere in the world at competitive prices. Dumeco is the second largest meat processor in Europe; its contribution will be the marketing of the pork products using its existing markets while creating new ones in the chilled segment of the industry and supplying brand names. Agriment will manage the project and supply the business expertise needed in all areas of the project. Several international swine genetic companies are being considered to supply the livestock: Bell Genetics, Dalland (Dutch Company) and Pig Improvement Company (PIC).
When I started to work on the Alaska Pork Project I contacted the National Pork Producers' Council. Dr. David Meeker was the NPPC vice president of research and education. Today, Dr. Meeker, director, Board of Agriculture and Natural Resources, National Research Council, Washington, D.C., has this to say about the Alaska Pork Project. "I believe the Alaska Pork Project can provide opportunity for a large number of farmers and land owners in Alaska and add value to their present operations. Don't forget, also, that there will be some good jobs generated for people who don't own land and are not currently in agriculture. Pork production has received much bad publicity, and many people equate all of it with the few bad things that actually happened. However, this project is a good business opportunity for Alaska citizens and pork production, when done correctly, can be friendly to the environment and to the local people."
How does the Alaska Pork Project compare to past agricultural projects and schemes? It doesn't. The Alaska Pork Project identifies the industry, its components, and economies of scale, participants, technology and markets. As a result, the effects the Alaska Pork Project will have on Alaska are:
* Giving rise to new industrial and non-industrial jobs;
* Increasing Alaska's agricultural production while establishing new markets;
* Increasing Alaska's opportunity to create a more diversified industrial structure;
* Providing an in-state market for Alaska's fish meal industry -- 44,000 tons annually.
* Contributing to Alaska's "Gross State Product" and exports.
I hope my comments will clarify any misunderstanding and better inform the public about the Alaska Pork Project's goal of building a pig meat industry in Alaska.
Richard J. Metteer is president of the Alaska Pork Project Inc. He has lived in Soldotna since 1977.
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