Manitoba Pork has come up with a strategy for dealing with the economic crisis producers face.
But most of the elements of the plan are out of producers’ hands and in the control of governments, banks, packers, retailers and consumers.
Gerry Friesen, a hog producer from Wawanesa, Man., said all parts of the industry need to pull together to make sure producers recover from the lowest prices in 27 years.
Friesen, chair of Manitoba Pork, estimates the province’s hog farmers will lose more than $19 million during the six weeks before Christmas, based on current cash prices and the average cost of production.
Read Also
Canada’s oat crop looks promising
The oat crop looks promising and that’s a good thing because demand is strong.
“Producers could feel a little more comfortable trying to make it through this collapse” if they knew they had the support of other parts of the industry and the general public, he said.
Friesen called for bankers to be compassionate with producers. Last week, he met with lenders and said his message was well-received. He urged hog farmers to meet with their bankers now, before payments become overdue.
“I know there’s a certain fear quite often in producers when they realize what kind of bloodshed there is at that point. They’re somewhat concerned about going to see the banker because they don’t expect it to be good news.”
Farmers also must learn to use risk management tools, such as forward pricing agreements for hogs and feed.
While Manitoba Pork’s forward pricing options have been popular, he said many producers stopped using them when it came time to lock in unprofitable prices.
But during meetings around the province the past two weeks, farmers have been most interested in a forward contracting presentation, said Friesen.
“They realize it’s going to have to be part and parcel of their
future planning.”
Friesen called on American and Canadian packers to look for ways to push more hogs through their plants. The faster North America works through its supply of live hogs, the sooner prices will rise.
“There are packers in Canada that don’t have full kill,” he said.
Retailers also need to lower pork prices in stores to better reflect the low prices and stimulate demand. Friesen noted the Canadian Pork Council is talking to retailers, and he hopes it will talk to consumer groups too.
Governments need to announce disaster assistance now so farmers can make financial arrangements until prices lift, said Friesen.
The Canadian government also must keep pressure on the United States to allow the hogs to cross the border, since U.S. producers are lobbying for preferred treatment at packing plants, he said.
