By Bruce Cochrane
The chair of the Saskatchewan Pork Development Board says ongoing shortages of live hogs in western Canada demonstrate the need for a made in Canada hog price.
In June, the highest U.S. slaughter hog numbers ever, resulted in the value of live hogs dropping by about 40 percent from this time one year ago, while in western Canada processing plants have continued to operate below capacity.
Florian Possberg, the chair of the Saskatchewan Pork Development Board notes, producers in western Canada have faced tougher times over the past 5 years than those in the U.S. so our hog supply has not been as abundant, and some of our plants are a bit short, while others are very short.
Florian Possberg-Saskatchewan Pork Development Board:
We're currently seeing a lot lower prices here in western Canada because we do have an international price, the United States, Canadian price.
So, because we're receiving lower prices, we're not getting the price signal to really increase our production here to ramp up and supply more hogs to our processors here in western Canada.
We have different factors that affect our industry here, whether it's Canadian exchange rates.
We've had instances where swine influenza has caused more demand issues in Canada than the U.S. so we really have 1 price but we have 2 different supply needs for our plants north and south of the border.
Obviously, if we're going to fill our plants here, we do need to have price signals that really encourage production here.
Possberg says packers in western Canada have traditionally bought hogs at a Midwest price or even lower due to the cost of freighting hogs to the Midwest, but if we're going to get the supply we need here to keep our plants operating at capacity, our packers have to figure out a way to give us higher prices so producers get the right signals.
Source: Farmscape