Williams is president of Saskatchewan Agrivision Corp.
Unquestionably the Canadian pork industry has suffered its deepest downturn in history.
The losses have driven many small operations out of hog production because of unsustainable negative margins.
Those hanging on have been piling up debt and exporting weanlings to the United States for growing and finishing to minimize loss.
The cause, as often cited, is the normal downturn in the hog cycle accentuated out of all reason by high feed costs and the increase in the Canadian dollar. This situation will predictably continue for a few months until the retraction in hog numbers on both sides of the border begin to impact on live hog and then retail pork prices.
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Recent timely action by the federal government in paying for sows removed from the breeding cycle has potentially started the turn around of the hog cycle.
There is also a light at the end of the tunnel in higher futures market prices that will occur in the spring of 2009 or thereabouts.
The interesting aspect to the situation is that those producers who intend on returning to the business should be planning now for restocking with gilts in order to have market hogs available in time for the market turn-around.
Predicting market trends is far from an exact science. However, the regular swings in pork prices are well known.
The damage from the most recent losses have been severe and some have lost their life’s work, some are waiting for the signal to re-enter the industry, while others, the larger operators, mainly had little choice but to stay the course.
This resilience is because there is nothing one can do with an investment in modern hog facilities besides produce more pigs.
The worldwide consumer demand for pork remains strong and the Canadian industry will survive. The cash crisis is not over but predictions of the industry’s death are premature.
