Canadian Pork Council president Jurgen Preugschas thinks a new Statistics Canada report needs some perspective.
The agency published 2010 farm cash receipts numbers Feb. 23 that suggested the hog industry was the farm economy’s bright spot, boasting a 15.7 percent increase in sales to $3.3 billion because prices rose almost 20 percent to their highest level since 2005.
Realized net income figures that account for expenses and depreciation will not be available from Statistics Canada until late May. They will offer a better bottom line picture of the industry last year.
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Preugschas said the optimistic gross receipts numbers have to be carefully parsed.
“We are coming off so many bad years that a high percentage increase is calculated on the very low base,” he said. “I would not say last year was the boom year those numbers would suggest.”
He said it was a year when 500 producers, close to six percent of the industry, left the business.
For his farm near Mayerthorpe, Alta., 2010 was the fourth consecutive year of losses.
“Things picked up in the last quarter, but we still ended the year in a loss position.”
The Statistics Canada report also noted that while cash receipts increased dramatically, hog marketings fell three percent to their lowest level since 2002.
A government sow herd buyout, the strong Canadian dollar and the impact of country-of-origin labelling in the United States conspired to reduce sales and exports.
“There are some signs that the industry is rebounding, but I think it’s way too early to tell if we are climbing out of the hole,” Preugschas said while attending the Canadian Federation of Agriculture annual meeting in Ottawa.
“Those numbers don’t necessarily reflect a rebound.”
Federal agriculture minister Gerry Ritz agreed.
He told reporters after a speech to the CFA that the hog industry is a cyclical industry, in and out of the trough.
“Lately, they’ve been sort of under the trough,” he said. “A little rebound does not a recovery make. We saw that with our (national) economic recovery, we recognize that with the pork sector. We’re going to work with them to make it stronger.”
Ritz said there are positive signs for the industry after years of losses and tough times.
“We look with positive feelings towards where they’re going,” he said. “We certainly look at record exports in 2010. We look at markets like Korea that are coming on board, Russia and so on that are picking up a lot more pork products.”
