CAMROSE, Alta. – Alberta’s hog packing plants want lower prices if they are going to stay in business.
“We need immediate relief,” said Greg Whalley, administration manager of Fletcher’s Fine Foods in Red Deer, one of two Alberta hog slaughtering plants.
Whalley said hog prices need to be about four or five percent lower in order for packing plants to make money.
“It’s very, very difficult for us right now,” said Whalley from the company head office in Vancouver.
He said the problem stems from the outdated pricing formula used by the Alberta Pork Producers Development Corporation, the province’s monopoly hog marketing agency.
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The pricing formula takes into account countervail duties, hog indexes and other factors that are supposed to generate an accurate hog price.
But Whalley said the formula is so outdated that either the packers or industry must continually step in to correct the price.
Paul Allers, a director of the marketing agency, told 12 farmers at a regional meeting here that the agency is willing to look at the formula to keep hogs in Alberta.
Two years ago both Gainers and Fletcher’s agreed to raise the price they paid producers for hogs even though the formula recommended the price be lower, said Allers. With this in mind, he said they’ll keep negotiating with the packers for an agreeable price.
Both want to make money
“The key to this thing is that we are partners. It would be nice to see us both make a decent profit,” said Allers, of Strome.
Hog prices have been steadily rising. In February, the Alberta price was about $156 per hundred kilograms and it has steadily increased. Last week prices were $168 per ckg.
But Allers said the agency won’t reduce the price if farmers begin to lose money.
Allers added the marketing agency would prefer to kill all hogs in Alberta. Sending hogs out of province because Alberta packers have reduced the number they kill costs producers money, he said.
“Your corporation is looking at different methods of keeping your hogs in Alberta.
“As of the other day, we haven’t bent at all. All we’ll say is we’re in discussion.”
Gainers refused comment.
