The current situation in the country’s hog industry is unprecedented, completely catastrophic and continues to be treated by various governments with a “head in the sand” attitude. In mid-December, prices dropped to below 40 cents/kg., approximately $35 per hog and the real cost of producing that hog remains close to $135 in most provinces.
The reason prices have fallen so low is overproduction but the fact that no Canadian governments are recognizing is that the glut of hogs is in the U.S., not in Canada.
Two years ago they killed 350,000 hogs per day. Today they regularly exceed 390,000 hogs per day. Their slaughter plants cannot handle such large numbers and they are working six days a week to try and get through the backlog of hogs.
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Here in Canada we do not have an excess of hogs.
Canada’s hog industry has not created the excess overproduction, yet due to the fact we take our price from the U.S. market we are reaping the ill wind from the U.S. over production. Our product is moving again in increasing volumes to the Pacific Rim, yet we continue to be fetlocked by the U.S. market.
The market is showing its first signs of recovery, however immediate assistance is required to avoid significant damage to our hog industry. This can be achieved by either provincial or federal floor price programs similar to Saskatchewan’s initiative.
The programs could restore producer receipts to $1.40/kg. And be retroactive to Nov.1, which was the first month that could be classified as a complete disaster. This program would be a loan which could be repaid when prices exceed a trigger price. Being a loan it remains NAFTA-friendly.
The only thing missing is the political will to implement such a program on the fears that it may be politically sensitive with the Americans. The U.S. is one of the world’s most protectionist nations when it comes to trade relations and some of our politicians lack the backbone to stand up for an industry in jeopardy of collapse for reasons not of its own making. …
As a producer, it disgusts me that our politicians have remained stubbornly ambivalent to a crisis that has ramifications to all sectors of agriculture. A floor price program is not a bailout; it is a form of support that will allow this industry to survive the absurd conditions that have been created in the U.S. If the Federal Minister of Agriculture would immediately dedicate even a portion of the $900 million he has said will be made available due to this crisis, to either a federal or provincial floor price programs, he could provide the means by which this industry can survive intact.
If you agree with the sentiment of this letter, it is essential that you contact your government representatives and insist that the political attitude be changed because the present government rhetoric will imminently remove 30 percent of this industry.
– Ed Larkcom,
Red Deer, Alta.
