The price war between two Alberta hog packing giants may be good for farmers’ pocketbooks today, but the chair of the pork board hopes the companies don’t spend themselves into the poor house.
“It’s not good to see the companies slugging it out and weakening their financial position. Later, they may try to recover some of those losses,” said Roger Charbonneau, chair of the Alberta Pork Producers Development Board.
Last week Maple Leaf Foods of Toronto announced it would add $4 to the premiums it pays to producers to entice hogs to its Gainers plant in Edmonton pegging the bonus at $24 per hog. In mid-January, the premiums started at $9 and jumped to $20 within a week.
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In a news release, Michael McCain, president said: “The situation is not of our making or liking but we have no choice but to defend our market share against the people who want to try to put us out of business.”
Greg Whalley, Fletcher’s Fine Foods vice-president of corporate affairs, said his company matched the $24 premium and has put it down to the “cost of doing business.”
Whalley said Fletcher’s is determined to create a world-class hog slaughtering plant. “One way or another we will achieve our objective … if that means paying $24 we’ll do it.”
Gainers has the capacity to kill about 4,000 hogs a day at its Edmonton plant. The premium costs the company about $100,000 daily.
Fletcher’s Red Deer plant can kill 8,000 hogs a day.
Despite worry the premium war will weaken the companies, Charbonneau said the bonuses are benefitting producers.
