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Profitability plunges as supply prices continue climbing

From new vaccine mandates for truck drivers crossing the Canada-U.S. border, to rail cars and cargo ships delayed by the B.C. flood recovery, to COVID-19 labour shortages, supply chain challenges in the agri-food sector have dominated news headlines in recent months. Combined with increasing inflation, cost of production for Alberta’s hog farmers is sharply on the rise.

“The past year has presented quite a few disruptions at every stage of the value chain,” said Bijon Brown, Production Economist, Alberta Pork. “Feed represents the greatest proportion of farm costs, and the price of other on-farm requirements can also have a harmful impact on producers’ businesses.”

Most recently, the price of certain pharmaceuticals has shocked producers who rely on these medicines to improve the health of their pigs.

“When we placed our last order to fill a certain prescription, the bill was nearly 50 per cent higher than when we ordered it just a while back, amounting to a few hundred dollars extra,” said Steven Waldner, who manages a medium-sized farrow-to-finish operation southeast of Lethbridge. “We have also noticed other products doubling in price by weight.”

In addition to feed and pharmaceuticals, other inputs have also become noticeably more expensive. By now, the world has been living with COVID-19 for nearly two years, and many wrinkles related to the pandemic have since been ironed out. Besides obstacles like worker absenteeism in meat processing plants or fewer goods moving across the international border, are other factors behind cost increases?

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Season 6, Episode 7: Takeaways from the Second International Conference on Pig Livability

Video: Season 6, Episode 7: Takeaways from the Second International Conference on Pig Livability

This year’s conference fostered open, engaging conversations around current research in the swine industry, bringing together hundreds of attendees from 31 states and six countries. Two leaders who helped organize the event joined today’s episode: Dr. Joel DeRouchey, professor and swine extension specialist in the Department of Animal Sciences and Industry at Kansas State University, and Dr. Edison Magalhaes, assistant professor in the Department of Animal Sciences at Iowa State University. They share key takeaways from the conference, including the importance of integrating data when evaluating whole-herd livability, building a culture of care among employees and adopting new technologies. Above all, the discussion reinforces that this industry remains, at its core, a people business.