Hog farmers who use low overhead straw-based production systems haven’t been able to escape the pain caused by high feed costs and a soaring Canadian dollar.
Robert McLean, who along with his son Don produces about 1,700 feeder pigs a year on his farm near Manitou, Man., said their operation is losing $20 to $25 on every animal they ship. Because of rising fuel prices, he added, their trucking bill has added about $3 to the cost of raising a hog.
The McLeans have housed their pigs in biotech shelters for about 12 years. Resembling giant tents, the lower-cost structures consist of large steel hoops covered with a giant tarp. The animals are bedded down with straw, which reduces odour and manure handling costs.
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McLean suspects that the closure of the hog packing plant in Saskatoon earlier this year reduced slaughter capacity and increased the bargaining power of the remaining operators: Maple Leaf in Brandon and Smithfield in Sioux Falls, South Dakota.
“Now, with Sioux Falls having so many pigs to kill, they have lowered the price,” he said. “I have that feeling because it dropped quite a bit once that plant closed.”
McLean said he believes the downturn in prices is part of a cyclical trend and hopes the situation might improve later on, possibly by the first quarter of 2008.
“It goes in cycles. We’re used to this. I just hope that it’s a short down cycle.”
Part of the appeal of low overhead production is the option of shutting down operations temporarily and waiting out the bad times. However, contracts for buying and selling his pigs has left him no choice but to stick it out.
“We’re in it for the long run,” he said. “We went through the 20 cents a pound days in ’97. I hope we never see that again.”
Black pigs are faring little better, and many fear that one of the few rare breed success stories in recent years, the Berkshire, may be returning to oblivion with only two remaining large-scale producers left in Manitoba.
Gordon Blatz, who switched from white pigs to Berkshires two years ago on his operation near Kleefeld, Man., said unless the situation improves he might be forced to sell his 250-sow weanling operation.
The heritage breed, prized by chefs for its flavour and abundant marbling, is less prolific and slower growing than its commercial counterparts, which adds to production costs.
“They are slower growing and they take more feed. So there’s two downsides right there,” Blatz said.
To break even, he needs to receive $65 for each 50 pound weanling.
Blatz makes his living selling weanlings to other producers but lately the demand for his animals has been so low that he has been forced to rent a barn and feed them himself.
“I’ve lost a lot of money. Now, I wish I had never seen a black pig.”
Markets in the United States are flooded, he said, and Japan has been closed to Canadian producers since a country-of-origin labelling law was passed early this year.
“The Americans want to slaughter their own stuff. It’s not COOL yet, but their product is their product. The Japanese, too.”
Marketer Bruce Daum said plans earlier this summer to regularly ship Berkshire cuts to a New York broker ran into unexpected hitches. He now ships about 20 head per week, but hopes to eventually boost it to 50 or 60.
Now focused on the Toronto market, he has hired a salesperson to help him pitch the product to high-end meat stores and restaurants one by one.
“This is a long, long road. Any time you build a new market through guerrilla warfare, you’d better be ready to spend some time and money,” he said. “We can’t sell to a chain of Sobeys yet.”
He urged producers who might be eyeing the exits to stick it out a little longer.
“The government could come to bat a little bit, too. They were quick to talk us all into raising pigs; then as soon as times get tough, they’re gone.”
