Processing is the key to the hog production engine. Without it, there is no industry. Yes, it does become somewhat of a vicious cycle, without live hogs there is no processing. That is why so many packers have worked hard to establish that partnership with hog farmers, and striving for direct ownership of those hogs in one form or another.
According to George Matheson, chair of Manitoba Pork the announcement by of the expansion at the Maple Leaf Foods bacon processing plant in Winnipeg, MB with funding from the federal/provincial Growing Forward 2 (GF2) program, is good news for the industry.
“The success of producers is directly linked to that of processors, and this expansion will increase the export of Canadian pork to highly valuable international markets. Bacon really does make everything better,” said Matheson.
The National Pork Producers Council fears, if allowed to move forward, a proposed ban on packer ownership of livestock could mean producer ownership of packing plants would also be banned.
In the United States, Iowa Senator Chuck Grassley is pushing a ban on the ownership of livestock by packers as a means of stimulating competition for livestock thereby raising prices.
Dr. Steve Meyer, the v-p Pork Analysis with EMI Analytics and Consulting with the National Pork Producers Council, says banning packer ownership would mean packers would be competing for all of their hogs but there would be more hogs flooding the market so prices would not likely be affected.
“We now have a significant portion of our packing industry that’s owned by producers,” said Meyer. “The last major plant built here was owned by producers down in Saint Joseph, Missouri, the two big plants being built right now have producer involvement. So, if packers can’t own pigs, will producers be allowed to own their packing plants which they’re very interested in doing?” Dr. Meyer sees a number of problems with this and doesn’t think there’s very much support for it.
Dr. Meyer also fears a clause which bans “anything that gives packers managerial control” could be used to ban marketing contracts. Marketing contracts cover 70 per cent of the hogs sold and are an important tool for producers, packers and lenders in managing risk and for managing factors like nutrition, genetics and rearing methods.
Back in Canada, the chairs and general managers from the four western pork producer organizations met in Calgary, where Matheson says they agreed to a joint investment in a mass euthanasia unit for western producers.
Obviously working together for the common good in this case is a good. Moving things like a mass euthanasia unit forward collectively is a good thing.
“The prototype is to be designed and constructed by PAMI (Prairie Agricultural Machinery Institute) at an estimated cost of $1.3 million,” says the MPC chair. “We are applying to GF2 for the majority of the funding, with each of the four provinces paying a share of the balance based on their percentage of western Canadian production.”
Matheson says the group decided to pick up a portion of the Advance Payment Project deficit incurred during the stay of default a few years ago when hog prices were staggeringly low.
“A discussion of the future costs and needs of the Canada-West Swine Health Intelligence Network and current swine transportation issues rounded out the day’s agenda,” he said. “This productive meeting demonstrated once again the excellent working relationship Manitoba Pork has with our western counterparts.” •
— By Harry Siemens
