This time last year, the rumor mill was buzzing with news about a possible expansion of the Schneider Cor-10-P. hog processing plant in Winnipeg.
And on Jan. 31, 2000, Schneider announced it would spend $125 million to get its plant to the same scale as rival Maple Leaf Foods in Brandon. The company said it would start construction in late 2000 or early 2001 and hold an official opening in 2002.
But other than a brief mention in the annual report in September, the company has been silent about its plans for expansion.
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That had some industry players wondering whether Schneider has had a change of heart.
But last week, a company official said Schneider still wants to quadruple the size of its Winnipeg plant to process at least 85,000 hogs per week.
“There has been no change in plans,” said Dale Macksymyk in an interview from Schneider headquarters in Kitchener, Ont.
However, Macksymyk was not as definitive about the project’s timing.
When asked whether the company still hoped to start construction next year, he said: “I don’t want to forecast that at this point.”
And while he stressed the company’s plans haven’t changed, Macksymyk said it needs to be assured it will have enough hogs to run through the larger plant, and enough markets for the pork.
“It’s hard to say exactly that the plant will be open in 2002,” Macksymyk said.
“The conditions of the industry will dictate how fast we proceed.”
Prairie farmers have ramped up hog production during the past five years, he said, but significantly greater numbers are required to allow two major plants to operate.
Macksymyk would not elaborate on what rate of growth Schneider wants to see in the industry.
“When the time is right, we’ll know that the time is right,” he said.
He acknowledged it’s hard for producers to commit to expansion before a plant is built, but added the plant needs to be built at the right time in the hog price cycle.
The company is also watching for the results of the province’s livestock stewardship initiative.
Over the summer, a panel studied environmental issues surrounding hog expansion, and consulted with the public and experts about how to ensure expansion helps rather than harms Manitoba.
The panel plans to deliver its report to the provincial government by the end of November.
Schneider will also face an extensive environmental review of its expansion plans, starting with a proposal for the plant.
It has not yet submitted the proposal to provincial licensing officials that would start the review process, although Macksymyk said the company is working on one.
The chair of the Manitoba Pork Council said hog producers in the province are eagerly anticipating the Schneider expansion to provide more price competition for their hogs.
“Anything that increases the demand here is probably viewed as positive,” Marcel Hacault said.
He noted that Maple Leaf Foods took time to build its plant in Brandon, too. The plant was announced in November 1997 and opened in August 1999.
The Brandon plant has had a hard time attracting enough hogs to its kill floor. Prices have been high, North American supplies have been tight and the strong United States dollar gives American buyers some extra clout.
Hacault said Maple Leaf might have enough supplies if all the hogs produced in Manitoba stayed in the province.
But lured by stronger prices, Manitoba producers continue to export hogs south. In 1999, 1.4 million weanlings were shipped south to feeder barns, and about 900,000 slaughter hogs went to U.S. slaughter plants.
New barn expansion has been “slow but steady,” Hacault said.
“The public seems to have changed its target from opposition to big hog barns to opposition to a hog. That’s creating problems.”
But he said he has no doubt that Manitoba has ample room for hog operations to supply both the Maple Leaf and the proposed Schneider plant.
“That’s our big plus,” he said.
