Canada’s hog packing sector is ignoring the export of the Canadian herd at its peril, says one of the country’s largest pig producers.
“We keep telling them, ‘Look you guys, you better take your crystal ball and look six months or 12 months out. Don’t assume that you’re automatically going to have all the hogs you need to fill your slaughter schedules,’ ” said Florian Possberg, chief executive officer of Big Sky Farms Inc.
The closure of Maple Leaf Foods’ plants in Winnipeg and Saskatoon has removed about 38,000 slaughter spots per week.
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Maple Leaf’s plant in Brandon will add 45,000 spots per week when it goes to a double shift, but it takes time to gear up production, leaving a temporary void in the market.
The downsizing has created a big surplus in market hogs, especially in Saskatchewan, where there is no federally inspected packing plant.
Packers are wrestling with currency and profitability issues and don’t have time to examine the exodus of weanling pigs out of the country.
“The feeling we kind of get is yeah, they understand it might become an issue but until it becomes an issue they’ve got other things to deal with,” said Possberg.
He contends that shortsighted approach will cost packers dearly when they eventually realize there is no longer enough supply in the country to meet their needs.
“Once (the pigs) get moved to the U.S. they’re not coming back. Brandon or Red Deer are not going to fill their weekly kills with hogs that they import from Iowa,” said Possberg.
Maple Leaf did not respond to a request for an interview.
Neil Ketilson, general manager of Sask Pork, thinks Possberg is bang-on.
He is forecasting a 25 percent reduction in Alberta’s herd and a 10 percent decline in Saskatchewan. When that is combined with the growing trend of shipping weanlings to the United States for finishing, facilities like the Olymel plant in Alberta could be in trouble.
“Right now they’re not double-shifting but if they ever hope to, they’re going to need more hogs,” he said.
Ketilson said Sask Pork is still working on building a new plant in Saskatoon to replace the Mitchell’s Gourmet Foods facility.
However, the project is in limbo while the industry attempts to get back on its feet.
The province’s First Nations community will be a big player in the facility, but it also requires producer involvement and now is not a good time to ask hog producers for money.
Ketilson said it is only a matter of waiting out the hog cycle before producers are turning a profit and may have the inclination to invest in such a plant.
“We anticipate it will be very tough for 2008, but in 2009 we expect the prices to rebound,” he said.
