While the grain markets continue to slide, the hog profits rise, which not a good thing for grain producers, but an excellent thing for the hog industry, but in Manitoba the processing hog numbers dilemma continues.
Andrew Dickson, the general manager of Manitoba Pork says it’s critical to rebuild hog numbers within Manitoba to ensure the pork processing industry remains viable.
Dickson says, although profits for hog producers keep rising, previous five-year losses forced many hog farms to close.
He says finding the financing to replace that capacity is difficult and producers refuse to invest due to provincial government requirements for anaerobic digesters to obtain a construction permit.
“We continue to marvel at the profits the swine industry is enjoying,” says hog commentator Jim Long. “Never did we ever in our wildest delusions ever believe North American profits per head could reach over $1.00 per head and $1.30/pound!”
Dickson says he knows Manitoba producers want to expand, especially in light of those kinds of profits, but first someone has to address this major financial hurdle of anyone stepping up to the plate to finance this pent up expansion.
“We’re down to just over 300 thousand sows in the province from 370 thousand to 380 thousand sows at one time,” he said. “It’s just a matter of rebalancing the production between the farms and our processing capacity. We can’t have processing capacity running at about 70 to 75 per cent when our American counterparts, our competition, is running at 90 to 95 per cent capacity.”
For obvious reasons, the business can’t sustain itself unless the entire province comes together, every sector from governments, financial, processing, producers, and supply sectors.
Dickson says improving the balance between production on the farm and processing capacity is key, not necessarily a sudden massive increase in production, but a relatively small increase in production but it would stabilize the processing side.
“That’ll have a huge impact in terms of cities like Brandon and Winnipeg in terms of employment because there’s a lot of further processing on pork in Winnipeg,” he says. “People forget that Maple Leaf Foods has a plant in Winnipeg with over 12 hundred employees and 200 in their office, so that’s 14,000 employees in one plant in Winnipeg.”
There is one other problem; ban on hog expansion in Manitoba and Keystone Agricultural Producers is calling on the Manitoba government to ease that ban.
People have short memories and most have forgotten the negative effects of Bill 46, passed in Manitoba in mid-2011, with a range of provisions intended to reduce the amount of nutrients entering Lake Winnipeg including extending a 2008 moratorium on new hog barn construction or expansion in eastern Manitoba, to the entire province.
KAP president Doug Chorney agrees with Dickson adding no one has replaced the hog farms that went out of production reducing the number of hogs available for the state-of-the-art processing plants in Manitoba.
“The key restriction is that every barn construction site must have a sewage treatment plant similar to a municipal treatment system and that’s just not practical, cost effective, or efficient on a farm level operation,” says Chorney. “We know there are technologies in place that are science based that very effectively deal with manure, farmers are very good stewards of manure management practices, we know crop removal rates are respected when manure is applied and injection is used almost exclusively.”
He says the NDP government thought out this policy poorly with dire consequences, especially at the Maple Leaf Foods plant in Brandon.
Chorney says the hog and cattle industries buys a lot of grain so it’s crucial to have a successful livestock sector to support a grain sector, especially when grain prices have tanked. •
— By Harry Siemens
