EDMONTON – Alberta pork producers are close to striking a deal with Alberta’s two packing plants on the price the plants pay for hogs, said pork chair Roger Charbonneau.
“I’m cautiously optimistic that we may have a deal,” said Charbonneau after Easter weekend negotiations.
A deal is close with one packing plant, but there are still some “conditions to be ironed out” with the other, said Charbonneau.
Both Fletcher’s Fine Foods of Red Deer and Gainers of Edmonton told the Alberta Pork Producers Development Corporation they needed lower pork prices to be able to make money.
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Outdated formula
The packers can bid on Alberta hogs offered by the pork board in a price range worked out by a formula. The packers have said the formula is archaic and doesn’t reflect the true price of hogs.
During the annual meeting, Charbonneau told delegates they had offered to sell each packing plant 13,000 hogs every week at the formula price set by the board. That represents about 65 percent of the 40,000 hogs sold in the province. The packers would be able to bid what they felt comfortable with for the other 35 percent of the hogs.
“I thought it was a win-win situation,” he told delegates.
Producers would be guaranteed a good price for their hogs, but the packers would still be able to buy a good portion of the hogs at a lower price. If the bid price was too low, the board would be able to sell the hogs elsewhere.
But producer Simon Goodwin said he has little sympathy for the packers.
“They’ve cried wolf once too often,” said Goodwin, of Calmar.
He said one minute the packing plants are telling producer they want to expand, and the next minute they complain the price is too high.
He said the plants know the board’s only option to deal with excess hogs is to sell them to Iowa or Manitoba and the transportation costs for the long trips would eat into most of the profits.
