When the call went out 10 years ago for Saskatchewan hog producers to step up production, they did.
The idea was to add value to grain by feeding it at home, rather than shipping it to foreign markets, and build a stronger livestock sector.
Saskatchewan producers now market about 2.5 million hogs, up from one million in 1997.
But limited domestic marketing options are putting those producers in a tough spot.
There have always been struggles, said Shirley Voldeng, who, with her husband Peter, operates Fairway Farms at Naicam and is first vice-chair of SaskPork, the provincial producers’ development, communications and promotion organization.
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The hog cycle goes up and down fairly regularly on a four-year basis, and margins are tight.
“You accepted that going into the industry,” she said. “It’s different now. It just seems a lot more down.”
The Voldengs got into the hog business in 1996 after leaving engineering careers. They quickly turned their farrow-to-finish operation into a successful business that earned them the provincial Outstanding Young Farmers award in 2002.
But last November they switched gears, becoming a multiplier for Monsanto breeding stock.
Among their reasons was the state of the province’s packing and processing sector, particularly federally inspected plants.
Maple Leaf Foods, which slaughters about 850,000 head a year, will close its Saskatoon kill floor at the end of May.
The much smaller plant in Moose Jaw has struggled for two years to restructure and reopen but is still closed.
Voldeng said many producers are examining their options as they look at increased freight bills to ship to Maple Leaf’s slaughter plant at Brandon, Man., or Olymel’s plant at Red Deer, Alta. She expects some will choose to get out of hog production.
“Is there a place for everyone?” she said, referring especially to smaller producers. “You can’t afford to send 50 pigs to Brandon.”
The production side has already gone through its growing pains. The price collapse in 1998 sent many small producers packing.
In 2004, Saskatchewan Wheat Pool sold its seven Heartland Pork operations to Sterling Pork Farm, a subsidiary of Stomp Pork Farms Ltd., angering farmers who had first right of refusal to purchase the land and hog barns.
A year later, thousands of rural investors lost money when the 16 Quadra-managed Community Pork Ventures barns – 13 of them in Saskatchewan and three in Manitoba – went into receivership and were purchased by Big Sky Farms of Humboldt, Sask.
The majority of production is now concentrated in the hands of Big Sky, with 45,500 sows, and Stomp operations, which have about 28,000 sows. About 20 percent of the production comes from Hutterite colonies, according to the provincial government.
But even the large marketers, who have economies of scale and ship to many markets, are concerned about processing in their home province.
SaskPork is co-ordinating an effort to replace the Maple Leaf operation in Saskatoon. The government is also involved.
Big Sky president Florian Possberg said it will be a challenging and expensive process.
“Saskatoon’s got a lot of good things going for it but freight linkages to the west coast are not cheap,” he said, referring to the large export markets in Asia and the cost of getting pork there.
Big Sky ships to eight markets each week so Possberg knows the costs involved.
He said if the proper business model can be developed, a plant that could kill one million head a year could survive.
With production of 2.5 million head, a lot of Saskatchewan hogs would still move to plants in other provinces or the United States, but a Saskatoon facility would offer a needed marketing tool for some producers.
