Major processors under capacity | Good prices have already brought closed barns back into production
Manitoba farmers closed dozens of hog barns in the late 2000s when sky-high feed prices and depressed pig prices made it financially difficult to raise hogs.
Moderate feed costs and robust pig prices have now reversed the situation, and a few producers have re-entered the business and re-populated existing barns.
However, retrofitting old barns isn’t the solution to Manitoba’s hog shortage, said Hubert Preun, who farms near Selkirk, Man.
“I can guarantee you that there is no barn in Manitoba, or very few barns … that aren’t in production that could be,” Preun said.
“The barns that could be fixed up … they are in production.”
Manitoba’s hog industry has been short of pigs for the last six to 12 months. Maple Leaf Foods has been slaughtering 65,000 to 70,000 pigs per week at its plant Brandon plant, which is well below its capacity of 90,000 to 95,000 hogs.
It and the Hylife slaughter plant in Neepawa, Man., may need more pigs, but farmers, Hutterite colonies and companies aren’t building new barns to increase supply. The Manitoba Pork Council has said the industry isn’t investing in new barns because the provincial government introduced onerous manure management regulations in 2011.
The rules — which are designed to protect Manitoba’s lakes, rivers and streams — require new barns to have an anaerobic digester to treat manure. These systems could cost $1 million or more for a small pig operation.
Several speakers at a Keystone Agricultural Producers meeting in late October said they had heard of Manitoba farmers re-populating old barns and re-entering the hog business, using the environmental permit for the existing barn.
Preun is one of those farmers. He left the hog business several years ago when he took a buyout package from the federal government as part of the $75 million hog transition program.
Preun got back into hogs in January.
“I re-entered on a different business model,” he said, adding he used to run a farrow to finish operation but now only finishes pigs.
“I don’t own the animals… I raise pigs for Maple Leaf on a custom basis.”
One of the two barns that Preun operated was only three years old when he closed it down. He heated the barn for the last several years to prevent deterioration, but he still had to spend more than $100,000 to get the facility back in shape.
“We had to put all new lighting in, all new fans … but structurally it was in perfect condition.”
Preun said it’s typically much more expensive to renovate an abandoned hog barn.
“I know of a lot of cases where (producers) walked away from the barn because the bank basically told them they had to close it out,” he said.
“Maple Leaf came by and said we’d like to rent your barn. They were looking at over a $1 million to get these barns back into shape.”
Doug Martin, who farms near East Selkirk, Man., has also re-entered the hog business.
Martin raised weanlings from 1995 to 2012, but sold his stock when market conditions were unfavourable.
He got back into hogs in June 2013.
“We shut down for about 10 months when it got really bad.”
Like Preun, Martin adopted a different model when he re-entered the business. He now produces breeding stock and sells weanlings exclusively in Canada.
“We had an opportunity to go into the breeding stock business…. It was a little more value added.”
It was costly for Martin to re-start his business because purebred animals can be expensive.
He agreed that retrofitting old barns is not the solution to Manitoba’s hog shortage.
“Any facility that is decent is back in production…. Maple Leaf has been pretty aggressive in renting barns,” Martin said.
“To bring a barn back … it’s a huge cost. All the electrical motors are gone and in some case the wiring. The corrosion just takes over.”
Martin said the only way forward is to change the government because the provincial NDP is hostile to the hog industry.
KAP president Doug Chorney said hog producers have lost faith in the government.
“They don’t have a lot of confidence in the future of hog production with the regulatory framework government has put on hogs only,” he said.
“They (the province) need to adopt practical regulations that make sense.”