LETHBRIDGE, Alta. – Southern Alberta pork producers say they’ll lose $10 a head in an already low market if they accept packers’ proposals to lower the minimum price paid for market hogs.
Fletcher’s Fine Foods and Gainers Inc. want to pay producers 94 percent of the minimum price set each week by the Alberta Pork Producers Development Corporation. One of the corporation’s duties is to work as a central desk marketing agency for the industry.
Board director Blaine Middleton of Vulcan at a producers’ district meeting in Lethbridge said several options are under negotiation.
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Producers could accept 94 percent of the price as offered, an option the district meeting here rejected.
Another choice is to keep the floor price and ship pigs to alternate markets if the packers won’t buy them. A third choice is a 60-40 split where producers sell 60 percent of their hogs to packers at the lower price and the rest on the open market. The last option is to sell all available hogs on the open market.
Both companies are talking about expanding their kill capacities, which Middleton said must be done at a profit for packers and farmers.
“Somewhere down the road if they want to kill what they’re talking about they have to make it more profitable for us to produce more hogs,” said Middleton. With record high feed costs, few producers are willing to take another cut.
Similar prices
Some producers in southern Alberta already send hogs to the U.S. but Jack Kalisvaart, vice-chair of the pork corporation, doubts they receive prices much higher than those offered by the board.
Farmers shipping hogs to the United States are supplying niche markets and earn a premium price over what Alberta packers pay. If the board opts for a totally open market it would be competing against Alberta producers, he said.
“It costs you about $29 a hog to send them south,” he said.
These additional costs come from countervail duties on live hogs shipped to the U.S., as well as freight costs and weight losses as the pigs travel greater distances to slaughter.
