After two months of negotiations, the agency that sells about 80 percent of hogs in Manitoba has reached pricing agreements with two major processors.
That leaves two to go for Manitoba Pork.
The agency’s assistant manager said the process is frustrating, but negotiations are plodding along.
“This has been an arduous, lengthy process and I didn’t think it would take this long,” said Rene Chabidon during Manitoba Pork’s annual meeting last week in Winnipeg. “Now we’re running out of time.”
Throughout negotiations, the agency has been selling hogs to processors on a week by week basis and capturing higher prices from competing buyers when possible.
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But in the long term, that would lead to instability and hurt both producers and packers, Chabidon said.
“The best situation for the industry would be to come to terms and keep the hogs here.” In the meantime, he said the hog business in the province is running as usual.
“Unless talks break down completely we will continue to work toward an agreement.”
The agency has an agreement with J.M. Schneider and with Maple Leaf Foods Inc. An offer is on the table from Springhill Farms, Chabidon said.
Negotiations between the agency and packers made headlines in February when agriculture minister Harry Enns had to step in to break an impasse.
For one week the agency did not sell hogs to provincial packers but found markets in other provinces and the U.S. Since then, the agency and packers agreed to an interim price while negotiating.
Chabidon said he never expected talks would take this long. Manitoba Pork first took its proposal for a new pricing system to processors on Jan. 9.
“I did not feel at that point in time that we were that far apart in terms of price or other factors in relation to coming to an agreement,” Chabidon said.
“I think a lot of the problem stemmed from the fact that we chose to negotiate on an individual basis rather than a group basis. That took a lot of time for the processors to accept and agree to.”
Because the agency no longer operates as a single-desk seller, the traditional way of setting prices with all packers at the same time is no longer feasible, Chabidon said.
Now that the agency has different prices and terms with each packer, it must keep the information confidential.
Initially, Manitoba Pork wanted packers to price off the new lean hog index price, generated by the U.S. Department of Agriculture from confidential information collected from packers in the three main hog processing areas in the U.S.
However, Chabidon said the agency was not successful: “Basically, we’re pricing off the western corn belt market. That’s about the only thing we can say there.”
