The latest hog pricing data shows that producers are now facing large net losses on their herds. While that is no surprise to those who make their living raising and selling pigs, it is eye-opening for the average pork consumer.
“We have heard from some producers that they are in the process of shutting down, not refilling barns, or are seriously contemplating getting out of the business. Many producers simply don’t want to carry large amounts of debt, again and again, and you can’t blame them for that,” says Darcy Fitzgerald, Executive Director of Alberta Pork. “By Christmas, some of these very efficient operations will likely be finished for good, and that’s bad news for both the industry and consumers.”
Two main issues plague the Canadian hog industry and especially in western Canada: methods of pricing pigs that do not cover producer costs and, more immediately, the current trade tariffs imposed on the U.S. by China and Mexico, which have a direct impact on the Canadian producer whose price is based on the U.S. price.
Fortunately for U.S. producers, their government is providing more than $800M in subsidies to counter the effects of these tariffs. But because up to 25 per cent of Canada’s domestic pork—products sold in grocery stores and restaurants—comes from the U.S., Canadian producers are at a disadvantage compared to their counterparts south of the border.
In essence, the Canadian pig farmer has been left to compete on the global marketplace with little support or confidence in the system, creating an unfair and volatile situation.
In an August 25 article by CBC News, the pork pricing issue was highlighted:
Alberta pork producers say they’re in crisis — and that this is a make-or-break year for them.
Producers say drastic price drops have some closing their doors and others on the verge.
John Middel, owner of Pork Point Farms in Rocky Mountain House, is worried. He says if things don’t turn around in the next month, he may have to close his barn doors.
“Short term, it’s a very trying time,” he said. “Long term, if there’s not some indication that pricing models are going to change here in Western Canada, independent producers will not and cannot stay in business.”
According to Middel, Alberta’s pork producers are the lowest paid in North America.