PORTAGE LA PRAIRIE, Alta. — Unless the Canadian processing industry steps up to pay producers more for hogs, independent pork producers will cease to exist in Western Canada in a few years, says a hog farmer from Manitoba.
Speaking at a Keystone Agricultural Producers meeting in Portage la Prairie yesterday, George Matheson of Stonewall, Man., said most Canadian pork producers aren’t paid the same as their American counterparts. If that continues much longer, independent hog producers will be driven out of business.
“I’d say the general feeling is that we’re at $10 per hog deficit to the U.S. producer,” said Matheson, who sits on the Manitoba Pork Council board but made it clear his comments were personal and not the opinion of the council.
“That doesn’t sound like very much, but if you take even a modest farm producing 10,000 hogs … there’s $100,000 you’re behind your U.S. counterpart a year. So if this sort of thing goes on for five years, as a producer you are down by half a million.”
Canadian producers who ship hogs to U.S. plants are paid the U.S. national price, less freight and marketing costs, which works out to $10 less than American producers receive per hog, Matheson said.
“They (U.S. farmers) are losing (money) right now, but they are losing less than we are. They will recover sooner … and they will be more inclined to increase their herd and expand their barns. Ultimately, we’re selling to the same markets and it will slowly squeeze us out of business.”
Pork processors in Canada pay the U.S. national price to Canadian farmers, minus the $10. So producers here are still at a price disadvantage even if they sell to Canadian processors, Matheson said.
Over the last several months Canadian hog producers have coped with record feed prices. In September, the Manitoba Pork Council estimated producers were losing $40 to $50 per on every hog sold.
In an announcement this week, Agriculture Canada encouraged hog farmers to use existing programs like AgriStability and Advanced Payment Programs to survive this period of red ink.
Doug Chorney, Keystone Agricultural Producers president, panned the announcement, noting the feds aren’t offering any new money to support an industry that is bleeding money.
“It’s a game changer this year,” Chorney said at the KAP meeting in Portage. “I don’t think the government gets it. I know they don’t get it because I just got back from Ottawa.”
Matheson would like to see hog producers sit down with processors in Canada to see if it’s possible to make up the $10 shortfall per hog. However, if processors aren’t willing to increase prices, the independent hog farmer will disappear, Matheson added.
“I think the processor can dig a little deeper into (his) pockets and pay the producer,” he said.
“Otherwise, to be quite frank, the independent producer in this country is dying a slow death…. If we cannot be competitive with the U.S. we are finished.”