VERMILION, Alta. – An Alberta hog producer wants his marketing agency to reduce the fee it collects per animal by 75 percent as a way to help producers weather the current price crisis.
“We’re using reserves now to continue to operate,” Bryan Perkins of Wainwright, Alta., said at a recent Alberta Pork regional meeting.
“We’re suggesting Alberta Pork should use some of the reserves when the industry really is in a time of crisis.”
He argued that Alberta Pork should reduce its marketing fee to 25 cents per hog from $1 if the Western Hog Exchange price falls below $1.10 per kilogram.
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A $1 per hog marketing fee is more than one percent of the total value of the present price of hogs and is too much for hog producers to pay when they are losing money on every hog, he added.
“We are an industry going through a cash crunch.”
Perkins said his farm has not replaced one of its employees who quit and has asked suppliers to delay payments and lenders to postpone principal payments to help cash flow.
Reducing the marketing fee to 25 cents from $1 would help his farm pay for the salary of one employee for a year if prices continue to stay low, he added.
“It does amount to a very significant number for us.”
Perkins said Alberta Pork could dip into its $3 million reserve to operate until the industry gets back on its feet. Only $1 million of the reserve should be used before the fees would return to the original amount.
Hog producers are expected to vote on the fee reduction resolution at Alberta Pork’s annual meeting in December.
