Saskatchewan hog producers are enjoying the fallout of the Alberta hog price war, says a director of the province’s hog marketing agency.
“They all view it as good news for the short term,” said John Germs, of Saskatoon.
Producers are enjoying a $16 a hog premium on their cheques but they know it won’t last.
“We are receiving substantially more because of the bidding war,” said Germs, who has a 200-sow farrow-to-finish barn.
Two weeks ago the SPI Marketing Group’s pool price average was $193.70, up $16.50 per 100 kilograms from the previous week. Last week the price had fallen back to $183.20.
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Saskatchewan’s weekly pool price is set using a formula combining hog prices from other provinces and the United States.
The $24 a head premium offered by Alberta’s two large plants has driven Saskatchewan’s price up, said Germs.
Because of the price war, SPI has offered a “direct hit” program where producers can bypass Saskatchewan’s hog monopoly and sell to the two Alberta packing plants. The producers are responsible for their own costs to ship hogs across the border, and are committed to selling hogs to Alberta for a set period of time.
Selling to Alberta
Don Hrapiuk, SPI sales manager, said producers are taking advantage of the program.
Saskatchewan raises about 900,000 hogs each year, about half Alberta’s production.
Germs said while it looks enticing to ship directly to the Alberta plants they can’t abandon the two hog slaughtering plants in Saskatchewan – Intercontinental Packers of Saskatoon and Moose Jaw Packers in Moose Jaw.
“We’d all like to ship to Alberta but we can’t leave our existing markets. It would be short-term gain for long-term pain.”
