RED DEER – Unless there is a dramatic reversal in the price Olymel pays pork producers, there won’t be a hog industry left in Alberta, says the general manager of the province’s hog marketing agency.
Alberta producers can’t afford to raise hogs for the price Olymel now offers, Mack Rennie told almost 300 hog producers who travelled from across the province to attend an Aug. 22 Save Our Pork Industry rally.
“I hope they can kill rabbits in that plant because they’re not going to kill hogs.”
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At the beginning of July, Olymel announced it would lower the price it paid in the Red Deer plant by $12 a hog when each farmer’s contract came up for renewal throughout the year.
Producers say hog prices are already about $10 below the $140 per hog break-even level. Dropping the price a further $12 will force many to reassess whether they want to stay in the industry.
Rennie said that since the announcement, he’s been on the phone daily to Olymel’s head office in Quebec and to the Red Deer plant staff trying to convince them they will chase away business with the price drop.
“I’ve got to believe they’ll come around. There’s no way we can make a dollar at this value. If they don’t come off this, we are in dire straits,” said Rennie.
Last year, Olymel spent millions of dollars to double shift its plant to kill 45,000 hogs a week and make it more economical. But Rennie said the only way Olymel will keep up the numbers is to reverse the price cut.
“You’re not going to get 45,000 hogs a week at minus 12.”
Olymel officials did not attend the pork rally and did not return phone calls.
Hermann Simons, a pork producer and director with Alberta Pork, said low prices are not the only issue facing pork producers, but it’s the only one worth talking about.
“Our current situation is not a single issue, but it doesn’t mean minus 12 doesn’t need to be resolved very quickly or there won’t be an industry in Alberta,” said Simons.
Rory Campbell, Alberta’s new deputy minister of agriculture, said the government knows hog producers are in financial difficulty and will listen to any proposals the industry has to help solve the crisis.
“We are in a listening mode,” Campbell told the producers in noting the province created a Targeted Advance Payment program designed to help hog producers access money from the Canadian Agricultural Income Stabilization plan.
Campbell said Alberta Agriculture minister George Groeneveld is willing to take to cabinet any proposals that have a reasonable chance of success.
The provincial government rejected a plan from producers this summer requesting a loan to help buy half the Olymel plant.
Government officials were worried the money would end up at the Quebec head office without helping producers.
“This government has an unsuccessful history of providing loan guarantees,” said Campbell.
Neerlandia, Alta., producer David Hospers said the government encouraged oilsand development with financial help and now needs to do the same for the pork industry.
“I suggest the Alberta government look at investing in the Alberta pork industry the same way. It will help us out now and the government will reap the rewards down the road,” said Hospers.
“We need short-term help.”
Peter Hofer, from a Hutterite colony near Medicine Hat, asked if the government feels some responsibility for higher feed grain prices with its promotion of biofuel. High grain prices make it difficult to feed pigs economically.
Campbell said any Alberta government programs designed to encourage biofuel development did not cause high grain prices.
“It’s of absolutely no consequence in the current market situation,” he said.
Dick Allen said he came to the meeting to learn what industry officials and government agencies are doing to help.
“A lot of people are worried. It’s not so much how much they’ve lost to date, but the future doesn’t look great,” said Allen, who has a 2,200 head, farrow-to-finish operation near Penhold, Alta.
Leslieville, Alta., producer Arnold Van Ginkel said he is concerned about the number of pig farmers leaving the industry.
“If not enough pig farmers are left, the business might die, and that scares me,” said Van Ginkel, whose price review with Olymel comes up in two months.
Van Ginkel said quitting isn’t an option because of new hog buildings on his farm.
“We have too much debt. We can’t go out or we’d be bankrupt.”
Rally organizer John Middel of Rocky Mountain House said the strong turnout showed there is real concern in the industry.
“It really shows it struck a nerve. People do feel strongly for the pork industry and will rally for it to remain strong.”
