LANDMARK, Man. – Headlines may scream about hog farmers giving away pork or giving up their livelihood as hog prices crash to 25-year lows.
But there’s a quiet, cautious pride in the offices of one of Western Canada’s largest pork production management companies.
In the bustling headquarters of Elite Swine Inc., it’s business as usual, as 50 people make sure 34 sow barns and a coterie of nurseries and finishing barns have what they need to be as efficient as possible.
“The money is to be made all the time,” said Dickson Gould, Elite Swine’s president.
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“It’s just that right now, instead of making more money, what you’re actually doing is reducing your loss. We try to run with that philosophy year-round, whether it’s low prices or not.”
On average, close to 23 pigs are weaned per sow per year in barns associated with Elite Swine. The North American average is slightly over 19.
The managers at Elite Swine are confident this performance will help their producers weather the poor prices.
But they are loathe to boast. Elite’s producers are in the top 10 percent of North American producers when it comes to productivity, allows Ed Waddell, vice-president and director of Elite’s Alberta operations.
“When you’re going that good, your customers are making more money, they’re going to expand,” said Waddell.
Low prices tend to shake out the weakest players in the industry, he said.
“During the good times, everybody can make some money, but during the bad times, the people that have been less efficient for the past few years just can’t make it.”
Running as efficiently as possible and keeping cash reserves high has been a strategy for Redekop Farms Ltd., five brothers who, along with a half-dozen investors, own two large sow operations, a complement of nurseries, and some feeder operations, all associated with Elite Swine.
Aaron Redekop, who manages the production pyramid, said they knew the low cycle was coming and prepared for it.
“I don’t think anybody anywhere saw the severity,” he said.
Last fall, Redekop asked his investors to forego their annual payments. “I guess the wisdom of that has shown through,” he said.
Gould said Elite Swine has grown by five to 10 percent each year since its start in 1981.
“I would expect that next year, due to the economics side of things, there will probably be smaller growth than what we’ve had in the past,” he said.
Most expansion in the hog industry in the next five years will happen in larger scale operations, said Waddell.
“There will be a normal and natural attrition in the industry so that there will end up being somewhat less of the smaller operations,” he said.
The current low prices won’t impact Elite’s plans for expansion, said Waddell.
Rather, the limiting factor on expansion will be finding personnel to work in barns.
“We really expand only as fast as we have people who have the depth to take on the next phase of expansion,” Waddell said.
