Unity called for on packer price push

Hog farmers pressuring packers for fairer prices ask for support from related businesses such as feed and trucking firms

Retiring Manitoba Pork Council chair George Matheson used his final address to urge all businesses relying upon hog farmers to unite for fairer packer prices.

“We are … encouraging related businesses like veterinarians, feed companies and transporters to take up the cause because a good business helps everyone,” said Matheson at the April 15 MPC annual meeting.

“The processors did a great deal (to) keep the plants running the best they could this past year, during COVID, but nonetheless, pricing reforms are necessary.”

Chronically weak prices have undermined Western Canada’s hog industry, producer groups say. Too little of the pork value of the pigs is shared with producers, leaving critically low margins over the course of the hog cycle.

That, they argue, will cripple the ability of the industry to reinvest in hog barns and keep the sector going.

During the early stages of the pandemic most of Western Canada’s processors offered premiums to their usual formulas, but those are a temporary fix and varied from packer to packer.

Western Canadian hog producers have called for a Quebec-style pricing system to be brought in to replace the present one. That would give producers a connection to the cut-out values from which they are currently divorced.

Advocates of the Quebec model say it provides about $30 per pig more than western Canadians receive.

Early in the pandemic, hog prices slumped as some hog plants shut down and backed up hogs on farms across Canada. That caused hundreds of thousands of hogs to be slaughtered across North America. But soon most were back in production and prices soared due to booming domestic demand, consumer hoarding and exports to China.

However, farmers didn’t generally see much of those high prices. That has improved somewhat in recent months, as the market has remained strong and packer problems have subsided, but Matheson warned against becoming complacent now that the extreme losses have temporarily disappeared.

“One of the problems in the past… has been that our attempts to change the pricing system has been driven by emotion,” said Matheson.

“So let’s not stop our quest for pricing reforms just because prices have risen. A bad pricing system remains exactly that, regardless of how high prices are.

“It’s a system that’s broken that needs to be fixed.”

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