It’s been five years since the hog barns were full on John Germs’ farm.
The Saskatoon area farmer de-scribes the time as bittersweet. He spent 32 years in the business, shipping up to 95 hogs per week, before switching full time to grain.
“I wake up every morning and I still know exactly what day of the week I would have had to do what. Today would have been weaning day,” he said during a Thursday interview.
“I can walk through my barns — there’s no power in them — and I know exactly how many steps to get to the door.”
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Germs still receives hog prices daily and watches the industry closely even though he, his wife and four sons decided to move on.
“It’s just sad,” he said of watching the industry go through constant financial struggle. “I can’t say those words enough.”
Germs held on longer than many of the province’s small hog producers as the industry took a go-big-or-get-out approach beginning in the mid to late 1990s.
The federal government had ended the Crow freight subsidy and Liberal agriculture minister Ralph Goodale was touting the Prairies’ cheap feed grain and how it would lead to a strong value-added sector.
Companies and investor groups like the former Saskatchewan Wheat Pool and Community Pork Ventures built mega-barns that could house 600 or 1,200 sows. Both ran into financial trouble and the barns ended up in new hands or closed.
Provincial governments on the Prairies promoted the big barn model even as detractors warned of consequences. Taxpayers and investors now know all about what can happen.
The Saskatchewan government first invested in Humboldt-based Big Sky Farms in 1997, under the NDP.
Over the next 10 years, it invested $29.8 million in debt and equity in what became Canada’s second largest hog company. The government still owns 42 percent of the company that is now in receivership even after a 2010 restructuring designed to keep it viable.
A government spokesperson doesn’t expect Crown Investments Corporation will get anything back on the investment.
Around the same time, all three prairie governments moved to end their single desk marketing boards for hogs. Germs said he believes that was the beginning of the end of the industry, in Saskatchewan at least.
Eric Upshall, then-agriculture minister in Saskatchewan, said there didn’t seem to be a choice. The industry was changing on its own.
“I was a believer in the marketing board because it worked very well,” he recalled.
“The problem was there were fewer and fewer people who were having five to 15 or 20 sows and raising them in moderate facilities. It was a lot of hard work. The result of that was you either modernized, mechanized, or you got out.”
Many chose the latter.
Retaining the marketing board wouldn’t have stemmed the exodus, he said, because the returns compared to the work involved didn’t make economic sense.
“Without direct subsidy, even the marketing board itself couldn’t keep them in,” Upshall said. “The marketing board, while it gave better returns overall, still was at the whims of the market.”
Former Alberta Progressive Conservative agriculture minister Walter Paszkowski said in hindsight there should have been a plan to keep smaller players in the game. That doesn’t mean subsidies, he said, but policies that didn’t exclude them.
For example, central buying programs by institutions and food services don’t benefit small producers and processors.
“The number of processors that we have now has certainly dropped very dramatically in the last 15 years, and that of course reflects upon local producers,” he said. “Everything now is designed for big. The producers, the processors, and there’s risk there. We don’t have back-up.”
Alberta’s single major processor, Olymel at Red Deer, has struggled along with the producers who supply it.
Saskatchewan lost its major packer, Mitchell’s Gourmet Foods in Saskatoon, after Maple Leaf consolidated its operations at Brandon about six years ago.
Germs said if the plant had re-mained open, producers like him might have remained viable.
“I think when you don’t have a packing industry in the province and people look at the freight factor, geez $12, $15 a pig, that used to be our profit,” he said. “You just can’t pencil it.”
In Manitoba, former Manitoba Pork Council chair Marcel Hacault now watches the situation from the outside as well. He ran a 100-sow, farrow-to-finish operation on his Niverville farm until 2005.
Niverville is also the home base of Puratone, the country’s fourth largest hog company, which is currently operating under creditor protection.
Hacault said there are numerous places to lay blame for why the bigger-is-better model hasn’t worked, and people still involved tell him the Canadian dollar is a big factor.
The industry was built on a Canadian dollar worth 65 cents in U.S. currency and that favored an export focus. He said producers couldn’t compete at a dollar value above 80 cents US because margins would be too small.
Government policies were made with the best information they had at the time, said Upshall and Paszkowski.
“In the mid-’90s we did a study as to what commodity really had the best long-term return,” Paszkowski said. “At that time it was hogs.”
Hacault said given the realities in the mid 1990s — the end of the Crow freight subsidy and the push to add value on the Prairies — choices were made.
Now many barns, built with what Germs calls “Grandma’s money,” sit empty.
“Today the only mistake I can see they made with those community barns is they didn’t build the roofs high enough so that farmers could buy them, grain producers, and park equipment in them,” Germs said.
Hacault is burning his barns down because the decommissioning regulations are so stringent and expensive.
Just north of him, a 1,200-sow unit sits empty and closed.
“All the government policies tell you to get big or get out,” he said.
Sometimes the two aren’t mutually exclusive.
