New hog barns could soon be built in Manitoba, after eight years of little to no construction.
The weak loonie, combined with the repeal of U.S. country-of-origin labelling and relaxed manure regulations in Manitoba, have produced the right conditions for new barn investment.
“There are barns that are going to be built. We talked to Hutterite colonies last week in Brandon. There’s a number of them seriously looking at … building barns,” said Andrew Dickson, general manager of the Manitoba Pork Council.
An investment in new barns and hog production is needed because many of Manitoba’s hog barns are 20 to 25 years old. The life span of a barn is typically 30 years.
“We should be building about 20 barns a year (in Manitoba),” Dickson said. “Over the next 10 years, we essentially have to replace most of the buildings we’ve got. That’s a $2 billion investment.”
Companies, colonies and individual producers built only about four barns since the late 2000s because provincial regulations curtailed investment.
The province placed a temporary moratorium on new barn construction in 2006. The government said inadequate management of hog manure was devastating the quality of water in Lake Winnipeg.
The moratorium evolved into a ban on new barns or barn expansion in the eastern half of the province.
Then, the province said new barns could be built if producers installed an anaerobic digester to treat manure.
Hog farmers said the plan was untenable. Anaerobic digesters cost $1 million and weren’t effective at removing phosphorus.
In 2015, the province backed away from digesters, saying a two-cell lagoon system that separated solid manure was acceptable. It initiated a pilot project to evaluate the technology.
“The two-cell lagoon is very doable,” said George Matheson, Manitoba Pork chair.
The relaxing of regulations leaves cost as the biggest obstacle to new barn construction. Estimates suggest a barn costs $500 per pig place.
“Say a person wants to build a 4,000 space feeder barn, that’s $2 million,” said Matheson, who farms near Stonewall. “Over (30 years) it would prove to be a good investment.”
A Manitoba hog production company is moving ahead with such an investment.
“I can’t give you names,” Dickson said. “(But) one organization has to build two finisher barns because they had a fire and need to replace the buildings.”
Producers have also hesitated to build new barns because banks were reluctant to provide the necessary financing. That roadblock may now be solved.
Dickson said Farm Credit Canada will finance 65 percent of new construction costs for farm buildings up to a maximum of $500 (per pig place) over 15 to 20 years.
“That’s a big breakthrough.”
The lack of new barn construction has compromised the viability of Manitoba’s hog processing industry. The Maple Leaf Foods plant in Brandon is capable of processing more than 90,000 pigs a week but it has slaughtered less than 75,000 a week over the last 18 to 24 months because of two few pigs in Manitoba.
“Our Brandon processing plant … is underutilized compared to large U.S. plants and this is a consequence of diminishing hog supplies in Western Canada, although we’re mitigating this through increased shipments of pigs from Ontario,” chief executive officer Michael McCain said at the Banff Pork Seminar Jan. 13.
“There have been very few barns built in Canada over the last few years…. By comparison, more barns have been built in Minnesota and Iowa alone, in a single year, than we’ve seen in Western Canada in the past many years.”