by KATE PROCTER
Over 500 pork producers looking for answers came away frustrated from an industry crisis meeting in Stratford Wednesday. A $75 million federal buyout program means exiting the industry – not merely shutting down one or two barns - was the only new detail revealed about a federal government aid package announced in August.
“If government made an announcement a month ago and we still have no details, it is a joke that farmers will have money in their hands in time to save any farms,” said one of the many producers who took turns at microphones to grill speakers and offer comments.
“Should we accept the (federal government-backed) loan or fight harder for a $30/hog payment?” asked Mike Bosch, Perth County Pork Producers president, referring to a Canadian Pork Council (CPC) recommendation that producers receive the payment for hogs marketed in the first quarter of 2009.
Martin Rice, the Council’s executive director, said the recommendation obtained “no traction” with the federal government. “We have less than solid endorsement for this even within our own industry.”
The federal government and the banks are still hammering out the August aid package’s details, he said, warning a fall election would derail this process.
Asked why the Council has not done more, Rice said the federal government refuses to discuss more lucrative arrangements to cover industry losses and wants to see value for the money it spends.
Ontario CPC representative Curtiss Littlejohn said producers must exit the industry entirely to be eligible for the buyout. Littlejohn anticipates a bidding process used to qualify for the program will start in October. It's likely animals shipped after August 15 will qualify under the program, he said.
Producers criticized the bidding process, saying it pits farmers against each other.
“The process forces producers to do a critical analysis of their business structure,” Littlejohn responded.
Al Mussell, senior research associate with the George Morris Centre in Guelph noted Canadian processors are also suffering.
Helping processing “would help the hog industry,” he said, noting a chronic under-investment, hostile tax policies and other regulatory issues impede Canadian processors’ ability to compete.
Producers asked why Canadian leadership did not fight U.S. Country of Origin Labelling legislation.
“There was an opportunity to play bloody-nose politics and we just didn’t act,” said Mussell. Ontario is the largest market for Washington apples – this is just one example of where Canada could have had some leverage in trade issues with the United States, he said.
Mussell said supply management is not a good option for the industry, explaining improved prices depends in part on there being no substitutes available for the managed commodity which would lower demand. In the case of pork, consumers can choose other products such as beef and chicken.
Supply management also requires the commodity have a domestic focus; a transition would severely reduce pork production nationwide given the country’s current focus on exports, he said.
Mussell stressed the crisis is no fault of producers. The industry must downsize and there is no shame in exiting, he said. Ontario has a lot of advantages that will provide opportunities in the future, providing the industry can work as a system.
Organized by pork producer associations of Perth, Oxford and Huron counties, the meeting drew producers from across southwestern Ontario and lasted well over three hours. BF
Comments
Investors are either Bearish or Bullish on any given business or industry or sector. That is what makes a market. Mergers and Acquistions are what is needed at this time in the hog industry.
The time to get in is when everyone else is getting out. Where is all the money hog farmers made over the past decades. Hog production was historically the most profitable of farm business.
Hog farmers were very proud of the profits they were making.
Pork is a versatile meat and popular worldwide. Profits will be good for those capable of investing large sums in land and buildings. Homegrown corn and soybeans or barley and peas can be turned into pork effeciently. Never look to government for help. Equity capital is the answer and the industry will end up in the hands of fewer and fewer people. That is how capitalism works.
why do hog farmers have to take the buyout and exit when tobacco farmers didn't?
If every hog farmer would have no more than 100 sows, then we could have many many hog farmers yet making good profits. But alas, too many greedy corporate guys out there trying to get the whole pie. Unfortunately we brought this punishment on ourselves. We must get rid of these large corporate operations.
Corporate Farms go broke too. Take a look at Stomp Pork in Saskatchewan and also Big Sky who has lots of government ownership.
It is not about size it is about managing money and debt.
Corporate farms have huge expenses and are very vulnerable to poor money management.
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