Saskatchewan hog farmers lead the nation when it comes to downsizing herd numbers and reducing pork production.
But industry leaders warned last week that reducing production too much could devastate the industry.
Neil Ketilson, general manager of the Saskatchewan Pork Development Board, said industry retraction is needed in North America but the loss of too many Saskatchewan producers could have unintended consequences.
“As you begin to see large drops in production and a reduced number of people in the business, what you’re also going to see is that the infrastructure behind the industry will begin to disappear as well,” he said.
Read Also
VIDEO: British company Antler Bio brings epigenetics to dairy farms
British company Antler Bio is bringing epigenetics to dairy farms using blood tests help tie how management is meeting the genetic potential of the animals.
“The feed companies, the vets, the equipment manufacturers, all of those people are making changes to their operations simply because of the economics of doing business in the province.”
Ketilson said the comparatively large reduction in Saskatchewan’s breeding herd is partly because of the loss of Stomp Pork, which went out of business earlier this year.
Before it filed for bankruptcy, Stomp was the province’s second largest hog producer, at 500,000 market hogs per year.
The company employed 250 people at 11 barns and two feed mills in Saskatchewan.
Ketilson said large producers such as Stomp and Big Sky were instrumental in building the province’s hog herd and modernizing the industry.
They helped set a new standard for efficiency by developing new production models and minimizing per unit production costs, he said.
At the same time, Stomp’s failure significantly affected overall production numbers and left unsecured creditors holding accumulated debts worth more than $8 million.
“When you get these large (producers) that are very dominant in terms of the provincial scene, if they discontinue production you’re going to see very significant shifts and drops in overall production,” Ketilson said.
News two weeks ago that Big Sky Farms is seeking creditor protection has sent another shock wave through the industry, particularly in Saskatchewan and Manitoba, where the company operates 20 barns and 21feedmills and has an annual payroll of $13 million.
Big Sky president Casey Smit said the company has already reduced its sow inventory to 42,000 animals, down from 51,000 a year ago.
He said the company’s restructuring plans, which included an application for creditor protection, do not require additional production cuts nor do they involve further liquidation of the company’s key assets.
“All of the company’s production related changes have been made over the past year and a half … and our intention is to keep all of our operations fully functional in all of the communities that we reside in,” Smit said.
“Big Sky has already reduced its sow inventory by 18 percent, which really began more than a year ago, and all of these changes were made as a result of adjusting to the continuing downturn in the industry.”
Ketilson said Stomp’s demise, combined with operation changes at Big Sky, have had a noticeable impact on supporting businesses.
Earlier this year, Del Air Systems, a manufacturer and distributer of livestock ventilations systems, stopped production at its production facility in Humboldt, Sask., putting 70 people out of work.
Del Air had manufactured livestock ventilation systems since the early 1980s.
More recently, UFA Construction announced its intention to close its Stirdon-Betker office in Saskatoon as of January.
Stirdon Betker builds livestock barns and production facilities.
Natalie Dawes, manager of corporate communications with UFA, said the decision to close the Saskatoon office, combined with other changes at UFA’s construction division, will result in 38 layoffs.
Other operational changes at UFA will result in the elimination of 45 additional jobs, she added.
