Producer reaction mixed to hog loan plan
NIVERVILLE, Man. — A hog industry stabilization plan proposed for Manitoba has left producers feeling either abandoned or relieved.
The difference in reaction depended on what they do in the industry.
“It sounds like a stabilization thing, which makes sense if they can cover the fall and winter,” said farrow-to-finish producer Jerrold Siemens of Morris.
“It helps bridge things, at least on a temporary basis.”
However, the program offered nothing to weanling producer Matthew Eggenberger of Steinbach.
“There is not very much done for us,” said Eggenberger, whose 300 sow farrowing barn is empty.
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“We always have to find our own way.”
The Manitoba plan, which is still being formalized, will deduct money from hog producers when they sell market hogs to packers and then pay it back to them if they sell at prices calculated to be below the cost of production.
Farmers will initially be paid out much more than they are contributing in levies, with the deficit covered by a provincial government-backed line of credit.
Farmers will continue to pay into the program once profitability returns and the deficit will be paid off.
Siemens said another loan won’t improve the industry’s long-term economic challenges, but it might allow farmers to weather the present short-term challenges until profitability returns.
“It’s a creative way of accessing money on a short-term basis.”
Weanling producers are excluded because the payouts are based on slaughter hog sales.
Manitoba Pork Council officials said that was partly the result of the program design, which relies on packer sales. However, it was also deliberate because weanlings are generally exported.
The provincial government “wouldn’t even consider covering a hog that was being exported,” said council chair Karl Kynoch.
Governments and industry insist that programs to support hog farmers cannot be seen as trade-distorting, and there is no easy way to channel money to farmers who primarily export pigs to American buyers without creating a risk of U.S. trade action.
Eggenberger said the program leaves weanling producers completely exposed, which is a harsh situation for a sector of the industry that has probably suffered more than any other.
“We have taken a pretty big beating in the past,” he said. “Whenever prices (for market hogs) fall, many buyers push it all back to the weanling producer, and he gets almost nothing.”
Eggenberger said he has fared better than other weanling producers because he sold to a neighbouring farmer who treated him fairly.
However, many southern Manitoba weanling producers went into the present slump already suffering because American buyers had re-neged on contract sales .
Eggenberger doesn’t plan to re-stock his barn until the situation improves, and right now that doesn’t look like any time soon.
Siemens said the program might allow slaughter hog producers to limp through until next summer, if the program is structured right.
“It’s always the details that make the difference in the end.”
However, Eggenberger said weanling producers will continue to suffer, fail or quit.
- Pigs were the most valuable agricultural commodity in Manitoba from 1999 to 2007, followed by canola, wheat and beef cattle. However, record high crop prices for canola and wheat pushed them above pigs in 2008.
- The pork industry injects about $1 billion into the economy annually, providing more than 13,000 direct and indirect jobs.
- Manitoba is the largest pig-producing and exporting province, followed by Quebec and Ontario. Pig production is valued at more than $730 million.
- Manitoba is the third-largest pork exporter, behind Quebec and Ontario.
- There are slightly more than 800 pig farms, most run by family farms.
- Canada produced two percent of the world’s pork in 2007, but Canadian pork accounted for 20 percent of world exports at 1.03 million tonnes.
- Canada is the second-largest pork exporter after the United States, shipping pork worth $2.4 billion to 96 countries in 2007.
- Canada is the world’s largest pig exporter, with sales of $700 million to the United States in 2007.
- China produces and consumes more than 46 percent of the world’s pork.
- The top seven pork producing nations are responsible for 90 percent of world pork production and exports. They are also responsible for 77 percent of pork imports.
