Cover Story Sidebar: The six 'C's that confront Ontario's pork industry
Wednesday, April 2, 2008
There are six major factors affecting the Ontario hog industry, say watchers of the commodity hog production scene.
Currency: the exchange rate between the Canadian and U.S. dollars.
Based strictly on price, Canadian pork is tough to sell in international markets and is even being displaced in Canada by cheap American pork. There is no sign that the Canadian dollar is going to weaken any time soon. Nor is the American dollar getting stronger as that country continues to pile up deficits and economic concerns grow.
Corn: The major feed ingredient is costly and prices show no sign of easing. Some farmers will continue to feed hogs by growing their own corn. Other will sell their crop.
Closure: Maple Leaf buys four of every 10 hogs marketed in Ontario. Whether the Burlington plant is closed or sold, Maple Leaf has already disposed of its Shur-Gain feed division and most of its Elite pig barns, and has indicated it won't process pigs in Ontario after the end of this year.
Cycle (hog that is) Pork production is contracting at least partly because of higher feed costs. In the United States giant pork producer Smithfield has announced plans to cut its production.
COOL, Because of impending country-of-origin labelling legislation in the United States, Canada's major pork market, some American packers say they may not buy Canadian hogs after this September.
Countervail: The trade injury sword which hangs over Canadian livestock farmers' heads every time prices are unfavourable south of the border. Wilma Jeffray, vice-chair of Ontario Pork, says countervail is a growing worry and American eyes are focused north of the border.
Ontario Pork cites that concern in its decision not to endorse a resolution passed at the Ontario Federation of Agriculture in February asking the provincial minister of agriculture to extend support to producers who don't make 51 per cent of their income from the pork industry. A concern is any sort of program that looks like it was handed out on a "per head basis." BP