Manitoba and Saskatchewan hog producers are confronting the Prairies’ giant hog packers with their own superagency.
SPI Marketing and Manitoba Pork Marketing Co-operative are amalgamating their marketing programs into one, called h@ms.
Eventually SPI and MPMC could fade away entirely.
To SPI manager Don Hrapchak, the Manitoba-Saskatchewan merger is natural.
“It’s just common sense,” he said.
“For the number of producers we have now, the duplication of services in Manitoba, Alberta, Saskatchewan, Ontario, across the country, is a mess.”
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
H@ms will be based in Winnipeg, be overseen by a bi-provincial board and is expected to be fully operational by Jan. 1, 2010, the two founding organizations say.
The new agency will handle all the procurement, settlement, transportation and other marketing tasks now done individually by SPI and MPPC. H@ms has already begun offering services and will offer more as it evolves, Hrapchak said.
The new agency will not restrict itself to Saskatchewan and Manitoba producers. Other hog farmers can approach the new agency about being represented by h@ms as well.
Already SPI has laid off four staff because their tasks will now be performed out of Winnipeg. After the amalgamation is done, SPI should be down to three or four staff.
Hrapchak said he didn’t know if SPI and MPMC would have much purpose after h@ms is operating all of their functions.
“I think each organization will have to answer that a couple, three years from now,” he said.
Mack Rennie, the manager of Alberta’s Western Hog Exchange, said the SPI-MPMC marketing merger makes sense.
“Most Saskatchewan hogs go to the Brandon (Maple Leaf slaughter) plant,” said Rennie. “This is common sense.”
The Western Hog Exchange is not interested in joining the new club.
“We’re working on other stuff with Olymel right now so we don’t have a lot of time to spend on that,” said Rennie.
However, some time “it could make sense, sure,” he said.
In the late 1990s, after the Prairies’ hog marketing monopolies were broken by provincial governments, the three prairie hog marketing agencies considered merging, Rennie said.
The three boards of directors met, but couldn’t work a deal at the time. All three agencies were trying to adapt to the rapid industrialization of the industry and had to focus on survival first.
“It just didn’t happen at the time. We were all trying to find ourselves,” said Rennie.
Since then, there are fewer packers on the Prairies, and far fewer hog producers. Merging will offer the same services to farmers at a “much reduced” cost, Hrapchak said.
“When I started here umpteen years ago, we had 19,000 producers. Now we have less than 100,” said Hrapchak.
“It makes sense for us to look at how we can reduce costs and still maintain services.”
SPI and MPPC market for more than 500 producers and sell about two million hogs per year.
