MARIAPOLIS, Man. (Staff) Here’s how the new forward price contract works:
- Producers phone Manitoba Pork. Using an automated system, they can choose to book their hogs for delivery, get markets information, or contract with sales manager Perry Mohr.
- The producer requests the current price for a given future month. Using CME live hog prices and other market information, Mohr quotes a price based on the index system used in Manitoba. The price agreed to at the end of the conversation is the contract price.
- Paperwork to be signed follows by fax or mail.
- Producers can designate which hogs they want to go against the contract on delivery.
- The contract is legally binding. If producers can’t deliver, they will have to pay double the administration fee plus the difference between the buying and selling price and any other expenses that Manitoba Pork incurs to cancel the contract.
- Producers are expected to deliver hogs that are of average quality, between 100 and 108 kilograms.
- Processors can also forward-buy a certain percentage of their requirements. That percentage has not yet been set.
