Quebec Imposes New Hog Supply System

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Quebec producers will be assigned to a specific packer and could eventually face production controls under a new operating system announced by the provincial agency supervising marketing boards.

Pricing will be determined using a formula based on U. S. markets; covers all pigs sold to Olymel, duBreton, Hebert, Dubreuil, Lucyporc, ATrachan, ASTA and Agromex.

The packers can slaughter all of the pigs they own and specific hogs they have contracted to buy from farmers.

Any other hogs are to be allocated to packing plants with their market shares based on what they have bought from April 1, 2008, until March 31, 2009.

As for production controls, the talk is about setting totals per barn, also based on the 12 months from last April to the end of this March.

There controls will aim to reduce seasonality of production volumes and because these quotas will be attached to barns and land, should bring some value to those assets.

There will be a 10 per cent sleeve to start, meaning farmers can go 10 per cent above or below their quota without being penalized.

The packers must take all of the hogs the farmers assigned to their plant deliver.

The Quebec solution is a sharp contrast with what’s been evolving across the rest of Canada where one provincial marketing board after the other has lost its marketing monopoly so farmers and packers are free (or left vulnerable, depending on your point of view,) to strike their own bargains.

Ontario is in the midst of transition. The provincial supervisory body has ordered changes that remove the board’s marketing monopoly powers, but a number of farmers have objected and the Ontario Agriculture, Food and Rural Affairs Tribunal has agreed to hear their appeals.

While awaiting those hearings, the tribunal has ordered a “stay” in implementation of the changes.

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