Canada is losing its competitive advantage as a world-leading pork producing nation.
It had strong, healthy genetics, an outward looking focus, cheap feed grain brought about by the demise of the Crow freight rate subsidy and a low Canadian dollar.
Those advantages are shrinking, with the greatest threat coming from the United States.
Overall, the U.S. Midwest has a $15 to $30 advantage over Canada when feed, processing and production costs are compared, said agriculture consultant Jerry Bouma at the Alberta Pork annual meeting Dec. 6 in Calgary.
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A toll is being taken with potential growth of the biofuel industry absorbing feed grains, shrinking processing capacity and government policies that threaten the right to farm, said the chair of Alberta Pork, Jurgen Preugschas.
One way to preserve the industry is to have the ear of government, said the Mayerthorpe, Alta., producer.
“Know your MLAs personally and make sure they know you. We must continue to stay involved so outside forces, especially those which may have an agenda against the pork industry, do not determine how we raise our animals,” he said.
That resolve may be necessary to save the industry.
North America is really one market for hogs with different regions holding particular competitive advantage, said Bouma.
A key factor is feed grain competitiveness.
The Alberta barley price is linked to U.S. corn prices, which are soaring. While corn productivity since the 1950s has been profound and continuous, barley improvements are flat.
The processing sector in the two countries leaves Canada at a disadvantage compared to the highly integrated corporate model used stateside.
The Canadian plants run at a higher cost and none has been successful in going to a double shift.
In the U.S., the 29 largest plants each handle 13,000 head per day compared to the top 29 in Canada where 3,200 head are processed per day.
“The cost advantage of the U.S. is somewhere in the order of $8-$12 per hog, which really is significant when it comes to the ability to pay producers,” said Bouma.
Canada needs to take the best from what is done in the U.S. and Europe to develop a financial partnership between processors and producers that is more fair to all.
To develop more cost effective feeding, three things must happen.
Regulatory constraints against the feeding industry should be lifted to allow the registration of high yielding feed grain varieties. Research into plant development is largely a public system and there is not enough investment. Also, an attitude change is needed where agriculture moves from being a problem industry to a solutions business.
