The latest report from Statistics Canada showing a sharp decline in the number of hogs and hog producers in the country doesn’t surprise Neil Ketilson.
The general manager of SaskPork believes the agency’s estimates that Canadian hog numbers have declined 11.6 percent and the number of hog farmers declined 19 percent doesn’t show the real picture.
“I don’t think the information shows as much of a decline as there really is. I think that’s going to double,” he said.
“We’re anticipating way more than 11 percent. Wouldn’t be surprised to see 20 percent decline.”
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In Saskatchewan, the numbers are even more dramatic. Statistics Canada estimates there are 30 percent fewer hog producers than the previous year.
In Alberta, the report estimates there are 24 percent fewer hog producers than a year earlier.
Across Canada, farmers reported 13 million hogs on their farms as of July 1, 2008, down 11.6 percent from a year ago.
Ben Hofer of Two Hills Colony and an Alberta Pork director, thinks the number of Alberta hog producers who have left the business is greater than the 24 percent estimated by Statistics Canada.
Even the Hutterite colonies, which produce a large number of the province’s hogs, chose to close barns and concentrate on more profitable ventures like grain production.
“Pigs are the last things on people’s minds.”
While prices for hogs have increased slightly and feed costs have dropped, producers are just breaking even in their cost of production. Many hogs going to market now were fed expensive feed for four months.
Ketilson expects hog prices may continue to improve, but it will likely be another tough winter for producers.
“We expect to see profitability in the industry again, but this winter is not going to be easy for them.”
Announcements of ad hoc payments by the Alberta, Ontario, Quebec and possibly British Columbia governments are a clear indication that federal programs are not adequate for hog producers struggling to stay in business, said Ketilson.
There is no such thing as small hog producers feeding fewer than 500 hogs a year any more.
“They’ve dropped right out of existence.”
Even producers with 300 to 1,500 sows are being forced out of business by banks or are choosing to leave on their own to save their assets.
“We’re seeing a lot of those people drop out. The people are very, very efficient, but they haven’t been able to make any money either,” Ketilson said.
The large operators are the only players still in the game, but caps on government programs have limited their ability to cope.
Even with profits expected to creep back into the businesses, Ketilson doesn’t believe there will be a resurgence of producers restocking their barns or increasing their herds.
“This has been 12 months of negative margins and that’s extremely hard for any business to take.”
In Alberta, many producers are pinning their hopes on The Way Forward, a policy adopted by the provincial hog industry to help focus the industry and become more profitable, he said.
The StatsCan report also estimated domestic slaughter is up 1.4 percent compared with last year after some slaughter plants increased capacity by adding a second shift.
Canadian hog exports declined in the second quarter of 2008 to about 2.2 million hogs, the first quarterly decrease in more than a year.
