An open market for hog sales is coming to Alberta Dec. 2.
The system will give producers several options: Sell hogs to the Alberta Pork Producers Development Corporation via its newly formed marketing division; sell directly to a packer; or sign a private contract.
There will be a two-year trial followed by a producer vote to see if this is the route they want to take.
Alberta agriculture minister Walter Paszkowski said the vote will be held once people have experience with an open market.
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“If they are voting today before the system is put in place, they’re working on a hypothetical basis.”
He said the new system will promote better communication between packer and producer through the use of contracts for specific types or quality of pigs.
“This will allow for rewarding those who are the better producers, the better suppliers of product.”
The experiment gives producers a chance to return to the status quo if that’s what they prefer.
“We will have an opportunity to get back what we had, if this doesn’t work out,” said Roger Charbonneau, chair of the pork producers development corporation.
Pork producers, packers and other industry officials have been discussing an open market concept with government since last spring, said Charbonneau.
Producer input
There has been producer participation through the pork development corporation during the process rather than imposing the system on them, he added.
“We negotiated a position for the development corporation so that we could be there for producers in the new system.”
Under the plan, a producer can continue to sell hogs through the pork corporation following the same procedures as before, where the board looks after buying, payment, insurance and hog deliveries.
If a producer wants to sell directly to a packer, the onus is on him to arrange a buyer, negotiate a price, handle delivery and agree on how payment will be made. If there is a fee for these services, the producer will be responsible for it as well.
Another change with this new system will be a $1 service charge on each slaughter hog sold. This replaces the $1.25 per hog levy now paid to cover costs of programs that benefit all producers including research projects, animal care, promotion and education programs.
If a producer deals with the pork board the service charge will be automatically deducted from his cheque. If he deals directly with a packer, the producer is responsible to remit the money to the board.
The dollar charge will not cover marketing costs, said Charbonneau.
“Marketing could be a service for a fee or it could be no fee at all depending what is negotiated with your marketer,” said Charbonneau.
Producers will receive forms for the collection system. The board will also have a tracking system on hog marketings to prevent losing fees.
Alberta has used a single-desk selling system since 1969.
