Industry resilient in face of potential challenges such as African swine fever, trade disruptions and market crashes
Manitoba’s hog producers are in an optimistic mood, regardless of the dangers they face today.
“This business is not for those who want a nice, safe life,” said Andrew Dickson, Manitoba Pork Council’s general manager.
Indeed, it was a stark contrast between the cheery demeanours of the 490 attendees at the Manitoba Swine Seminar, the best ever turnout for the 34 year-old event, and the string of dangers, risks and uncertainties that hangs in front of the province’s booming pork sector.
Currently, the dangers cover the waterfront of situations that could disrupt hog producers:
- The possible arrival of African swine fever in North America.
- Another trade disruption, like the one that just relaxed between Canada and China.
- A market crash that could drop prices far below break-even and exacerbate a debt squeeze.
- A resurgence of porcine epidemic diarrhea virus.
Manitoba’s hog industry is in the beginning stages of a province-wide overhaul, in which new barns are beginning to be built, old ones expanded or renovated, and new systems, such as open housing for sows, are being installed.
Last year’s prices were disappointing, but not a disaster.
Further west on the Prairies, Alberta and Saskatchewan farmers received worse prices and often felt bleak about the future, but on the eastern Prairies producers fared more like Ontario and Quebec farmers, who saw substantially better prices.
However, the seminar was dominated by talk of ASF, PED, looming North American pork oversupply and world trade tensions.
ASF in particular has producers taking stock of their “what-if” preparations as the disease ravages China, much of the rest of Asia and creeps across Europe.
“This is an existential event if it occurred in North America,” said Dickson.
Not only do millions of animals die, but trade and transport can be completely shut down, while prices drop and animals can end up with zero value.
“This is a 1998 situation, only bigger,” he said.
PEDv, however, now seems to be a disease that the industry has learned how to manage when it appears, often apparently through vehicle traffic from the U.S. Midwest to Manitoba. Lockdown and clean-out protocols have been established and are well-understood.
Trade is a factor producers have little direct influence upon, but it has a major impact on hog prices and movement. China blocked sales of Canadian pork over its diplomatic tantrum last year, but that block was lifted in the fall. However, the U.S.-China trade war led to U.S. pork sales being blocked, which backed-up pork throughout North America, undermining prices.
The U.S. appears to be building up trade tension with the European Union, which could have unanticipated consequences.
On the other hand, the United Kingdom has left the European Union and in a year might be looking for non-EU pork suppliers.
“They are desperate to get new trade agreements,” said Dickson. That creates opportunities for North American pork exporters.
“They import two-thirds of their pork products.”
On top of the disease, price and trade threats, producers now have to deal with aggressive activist invasions, like those that have been seen in Alberta and Eastern Canada. It’s an added element of threat to an already risky business.
But hog farmers have never been too rattled by risks, at least not those still left in the business. As many producers become closely enmeshed in relationships with various suppliers and processors, and more actively involved with their lenders, risk management preparations have improved.
In the end, Manitoba’s farmers are operating OK today and hope to get through whatever challenges pounce upon them as they have before, said Dickson.