The number of farmers using Alberta’s new hog futures contracts is confidential, but officials say there is active trade.
They say contracts are sold daily, they get inquiries every day and it takes more than three hours each day to fax information to farmers following price changes.
“It’s been very successful,” Ron Landry, data processing manager of the Western Hog Exchange told a handful of farmers at the annual meeting in Camrose.
“There is a lot of interest and we do contracts every single day.”
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It has been almost a year since the Alberta Pork Producers Development Corporation established hog futures contracts to give producers another way to sell hogs.
Farmers can follow minute by minute hog price changes and with a phone call to the pork corporation office, lock in the price and the number of hogs they want to sell.
“Sometimes we get three or four calls a day and the trading day ends at 11 o’clock,” said Landry of Edmonton.
Some southern Alberta farmers who haven’t dealt with the province’s hog marketing agency in years are doing business with them again because of the hog contracts, he said.
In addition to new futures contracts, former provincial minister of agriculture Walter Paszkowski moved pork to an open market system and eliminated the corporation’s single-desk selling mandate, that governed the industry for more than a quarter of a century. That gave producers the ability to sell their hogs anywhere they want.
Separate body
To deal with this, the marketing agency divided itself and formed the Western Hog Exchange to look after hog marketing.
The other side is called a universal services division. It looks after research, promotion, education, industry development and anything else that falls under the corporation’s mandate.
When the government created an open market, the two main packing plants were allowed to buy their hogs from anyone.
Fletcher’s Fine Foods in Red Deer has continued business with the Western Hog Exchange. Maple Leaf Foods in Edmonton doesn’t use the exchange to buy pigs for its Gainers plant.
For the first time in years the hog marketing agency doesn’t have a good handle on the number of hogs produced in the province.
“It’ll be very difficult to do industry comparisons,” said Landry.
