If Maple Leaf’s Burlington hog plant deal starts a downslide in salaries paid to Canadian pork plant workers, there could be a bright side for hog farmers, says a Manitoba agricultural economist.
Maple Leaf Foods, the country’s largest pork processor, has argued that American companies can afford to pay more for Canadian hogs because their workers earn less, said Daryl Kraft of the University of Manitoba, “so it may come about that the price of hogs in Canada could increase modestly.”
The deal between the company and striking unionized workers in the Burlington plant will drive pork processing salaries down across the country, he predicted.
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“It will set a precedent in food processing that the salary structure will be much lower for that level of skills.”
The price American pork processors are paying for Canadian hogs, less the price of shipping, exceeds what is being offered by their counterparts in Canada, Kraft said.
“Because of that, exports for finished hogs is expanding.”
According to Kraft, if Canadian and American prices become competitive with each other, Maple Leaf will not pay any more than what is required to keep the hogs in Canada.
“It will allow them a slightly larger margin, and that additional potential margin could go to pay a little bit more for hogs in Canada up to the point where exports to the U.S. no longer occur.”
Richard Pollock, chief negotiator for the Burlington local of the United Food and Commercial Workers union, said the deal there will have negative spinoffs for workers in the pork processing industry across Canada.
“It’s going to be ‘me too, me too’ collective agreements no matter where you go,” he said.
“The problem is the first guy does it because of greed and the rest have to follow because they have to compete.”
