Dozens of cars sit in the parking lot at Mitchell’s Gourmet Foods’s slaughter plant in Saskatoon while hundreds of pigs fill the stalls at the Hutterite colony in Rosetown, Sask.
Keeping both full is the goal the Saskatchewan Pork Development Board has set for itself as it tries to determine how to maintain slaughter capacity following Maple Leaf’s announced closures and restructuring.
On Oct. 12, Maple Leaf Foods announced it would not build a $110 million plant in Saskatoon and would close the slaughter plant owned by Mitchell’s Gourmet Foods in that city, Saskatchewan’s only major hog slaughtering plant.
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Sask Pork announced on Nov. 2 that it will study four options:
* A deal in which producers would buy Mitchell’s from Maple Leaf.
* A new producer-owned slaughter facility.
* A marketing partnership between Maple Leaf and producers.
* A new meat processor in the province.
Sask Pork chair Shirley Voldeng said the impact of losing 1,000 jobs at Mitchell’s is far-reaching and could affect many related industries.
“If we do not have a world class, federally inspected plant, we will export hogs, jobs and profits out of the province and out of the country,” she said. “We do not want to see packing come to an end.”
Joe Kleinsasser of the Rosetown Hutterite colony said recent announcements are hurting the industry and especially smaller producers like him.
He said it would not make economic sense to ship his colony’s 170 pigs each week any farther than Saskatoon.
“We’re not just taking home less profit but it is a matter of survival,” he said.
Kleinsasser, who is also vice-chair of Sask Pork, cited the cases of two new 500-unit sow operations planned in Saskatchewan that have now been shelved indefinitely. He compared the plight of hog producers to that of cattle producers who faced closed international borders after BSE was discovered in Canada in 2003.
“We don’t have the option of putting our pigs out in the back quarter till the crisis passes,” Kleinsasser said.
He warned of an impending crisis with the closure of slaughter plants.
“The face of this industry will change and it will take a long time to come back to where we were.”
Florian Possberg of Big Sky Farms, which has a new barn set to open near Pelly, Sask., this month, said producers will not plan further expansion in this economic environment.
He said the slaughter sector is key to the hog industry’s viability. He expressed concern over Maple Leaf’s and Olymel’s re-evaluation of their business plans, considering the two companies represent more than half of Canada’s slaughter capacity.
Saskatchewan closures will slap producers with increased freight costs as they are forced to ship to plants in Alberta, Manitoba or the United States. Potential trade issues could also ensue from increased shipments of live hogs to the U.S., Possberg added.
He said Saskatchewan has the feed, land and labour for swine production and a good reputation for supplying nutritious, affordable pork worldwide.
“There is no way we can afford to let that change.”
Neil Ketilson, general manager of Sask Pork, said concerns surfaced about the future of pork processing in Saskatchewan when Maple Leaf bought Schneider’s Foods, which owned Mitchell’s.
In 2005, the marketing agency created a business plan that looked at building a new slaughter plant. It is now revisiting that plan with the help of Meyers Norris Penny.
“We believe we have a great deal of support and help to do that,” said Ketilson, citing the 600,000 hogs that were pledged to the proposed plant at the time.
Saskatchewan has a viable pork industry, said Ketilson, and he doesn’t believe the closure of the Mitchell’s slaughter plant is related to poor returns. The company has boasted a healthy bottom line dating back to the 1940s.
More than two million hogs were raised in Saskatchewan in 2005, with approximately half of that number produced within a two hours’ drive of Saskatoon.
Hog production represents the third largest agricultural sector in sales in Saskatchewan, behind grain and oilseeds and beef cattle.
