Fusarium headblight and U.S. government farm subsidies are threatening to cramp future growth of Manitoba’s hog industry.
A study by the George Morris Centre found the combination of those two factors has made it cheaper and more profitable to produce pigs in southern Minnesota than in Manitoba.
While Manitoba can still produce weanling pigs more profitably than can southern Minnesota producers, the Minnesotans have the advantage in farrow to finish and finishing.
According to the study:
- Fusarium is costing many Manitoba producers between $7 and $20 per tonne of feed, since feed has to be hauled in from outside the infected area. On average it costs Manitoba $13.50 per tonne to deal with the fusarium problem.
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That equals about $3.27 per pig.
- The U.S. loan rate program encourages producers to hold corn in storage for most of the crop year. Often this does not cause a problem, but in 1999 and 2000 when there was already a corn surplus, the program encouraged U.S. farmers to dump corn during the summer, driving down corn prices.
Large disaster payments also encourage U.S. farmers to grow corn even with a surplus.
“This presents a policy-driven market distortion that damages the competitive advantage of the Canadian Prairies in both feed grain and livestock production,” the report said.
“Thus, U.S. farm programs have much to do with the southward exodus of Manitoba weaner pigs and other losses in Western Canada’s advantage.”
- Manitoba has a lower cost of production in farrowing. Lower labour costs, lower interest charges on debt and lower replacement livestock costs outweigh southern Minnesota’s feed cost advantage.
- Shipping weanling pigs from Manitoba farrowing operations to Minnesota feeder barns makes economic sense, because the low cost of Minnesota feed more than makes up for the shipping charge.
- Farrow-to-finish operations in southern Minnesota are more profitable than farrow-to-finish operations in Manitoba.
Better down south
“The results of this study are surprisingly clear,” the report concluded.
“Southern Minnesota holds an advantage over the Canadian Prairies in the farrow-to-finish and finishing enterprises. The eastern prairie region has an advantage in farrowing. This is a departure from two previous studies completed by the centre that found the Canadian Prairies to have a competitive advantage.”
Study co-author Al Mussell said he was surprised when he analyzed the cost of feeding a pig in the eastern Prairies versus feeding it in southern Minnesota.
“We’ve done this type of study before and come up with a different set of conclusions.”
