Simon Goodwin imposed a deadline on his Calmar, Alta., hog farm last summer.
The end of his fiscal year was Nov. 30 and those results would determine whether he might continue as a hog farmer. He lost $30 per pig, but discussions with staff and family made him agree to continue.
The Canadian dollar appreciating against a weaker U.S. dollar caused his greatest losses.
“I think we can give it another year. It depends on what the dollar does,” he said.
He has shaved costs where possible and is not sure if proposals on branded pork products will help when the industry is so dependent on American pricing and the dollar.
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He applied for neither the Hog Farm Transition Program nor the Hog Industry Loan Loss Reserve Program. His analysis showed it did not cover his shortfalls, so he has decided to wait out the crisis.
Alberta Pork chair Herman Simons of Tees, Alta., is also continuing with his 300 sow operation and has high hopes for a branded pork program that would define Alberta pork as a superior product more valuable than pork produced elsewhere.
“Here we are in a country that has the lowest amount that is spent on food and we (Canadians) don’t really want to support our industry,” he said.
“We have all kinds of food safety criteria and regulations but when push comes to shove, we go for cheap.”
Developing branded pork products could take 10 to 15 years, however, while the industry is in crisis now as more producers leave permanently.
Simons said the industry needs better risk management programs to keep people farming until the brand is a reality, but he doesn’t think supply management is an option.
“There has been a lot of discussion about supply management especially, because of the predicament we find ourselves in,” he said.
He understands why people would want supply management because it would remove risk and smooth out the hog cycle’s roller coaster effect.
However, a protected industry would be much smaller because there would be no exports.About 60 percent of current production is exported.
“Do each and every one of us want to reduce our production by 66 percent and then buy new production capacity to fill up that barn again in a situation where we are already overextended in our credit?” Simons said.
Florian Possberg joined the pork business in 1975 and has watched it shrink from 8,000 Saskatchewan growers to barely enough to form a quorum at an annual meeting.
“We developed a different business model that really prevented new entrants at the same level that we had years ago.”
He said producers need to make a profit and he has seen the same trend around the world, where lower profitability is the norm.
“It is causing a restructure of players around the globe but I think it is shortsighted to be too negative about the Canadian industry. It is too early to write us off.”
He said government assistance made it easy for some to leave the industry, but he expects new producers may buy the abandoned barns and restock.
“Coming out of this, we will see that there are innovators who adapt to the new environment and, assuming they are successful innovators, they will be profitable.”
