Maple Leaf Foods’ nationwide restructuring won’t devastate Manitoba’s hog industry, but Saskatchewan producers are in trouble, says the head of the Manitoba Pork Marketing Co-operative.
“I don’t think this (restructuring) bodes well for the hog industry, period, but I guess Manitoba’s is the best of the worst,” said Perry Mohr.
Manitoba is faring better than other provinces where Maple Leaf does business. While the company is shutting its slaughter plant in Winnipeg, it plans to add a second shift to its Brandon slaughter plant next summer.
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Meanwhile, the company is closing its Saskatoon slaughter plant, which is the only major plant in the province, and says ending slaughter there is its top restructuring priority.
Mohr said closing the Winnipeg and Saskatoon plants won’t create a shackle space deficit if the Brandon expansion occurs at the same time.
“If and when Brandon double shifts, then hogs from Saskatchewan and the hogs that will be displaced from Manitoba should be able to be slaughtered at the Brandon facility,” Mohr said.
Manitoba Pork Marketing Co-operative supplies the Winnipeg plant with most of its pigs, but Maple Leaf meat processing chief Scott McCain recently assured Manitoba Pork Council delegates that his company is keen to keep buying those pigs and will try to ensure an orderly transition.
He also said his company wants to keep the Saskatchewan pigs, but Mohr doubts Saskatchewan will continue producing lots of slaughter hogs if the Saskatoon plant closes.
“I don’t think there’s going to be as many bacon hogs finished in Saskatchewan,” he said.
“I suspect those producers that will remain in business will do what is necessary to make their business most profitable, and today that looks like a farrow to isowean situation.”
Saskatchewan hog producers may wish to keep producing slaughter animals, but a $6 per pig transportation charge to Brandon may eliminate any margin a producer can hope to make.
“At a 90 cent dollar, that doesn’t make much sense to spend six bucks a pig unless you can recover some of it,” Mohr said.
With Maple Leaf’s Brandon plant the only packer competing for central and eastern Saskatchewan pigs, there will be no bidding war to enhance prices.
“You’re not going to see Maple Leaf be market-plus (price) to incent hogs to Brandon, especially if there is no packing plant in Saskatchewan,” Mohr said.
Saskatchewan producers may be able to convert their farrow to finish operations to farrow to isowean, but that adds risk to those operations. As Manitoba weanling producers learned during the hog trade war with the United States, relying upon one export market can be dangerous, Mohr said.
