Well, I think maybe some years ago, Smithfield perhaps moved towards more outsourcing.

Smithfield's situation is a bit more nuanced. Essentially, we had a pig that our management wanted—a very fast-growing and robust pig. The idea was to produce as much as possible to fill our packing plants. However, new management came in and decided to change the model. They wanted more pigs rather than heavier pigs, which completely altered our index. We had a four-dollar weighting for feed per pound, and that dropped significantly. This change would have taken us five to 10 years to adapt to competitively. So, management decided to purchase outside genetics to move in that direction more quickly. They purchased DNA Swine Genetics, PIC, and Topigs. The main reasons Smithfield chose to do more outsourcing were because no single supplier could meet our demand in the required time span. PIC took the East Coast, while DNA and Topigs covered the West Coast. Additionally, using multiple genetics suppliers allowed us to ensure we were getting the best deal.

But from PIC's perspective, not necessarily the plus 20 cents, but from the perspective that PIC takes the risk of breaks or diseases globally because of this royalty, do you think it would be beneficial if PIC had a pure outright sale model and no royalty model?

That was the original thinking until you're forced to take a business to court because they haven't paid you, can't pay you, and have gone bankrupt. During the big PRRS and PED outbreaks, when people were going bankrupt and PIC was knocking on the door, PIC understood how bad that looked to the rest of the industry. That's when most were kind of forced into trying a royalty-type model.