Some hog producers are urging Alberta Pork to lead a charge to cut pig production in the province.
The unusual request is the latest instalment in an ongoing effort to staunch the flow of red ink in the province’s hog sector. But leading an effort to cut production in a bid to win higher prices from processors isn’t on the table, Alberta Pork said.
Officials from the organization recently met with six commercial hog farmers who apparently want to use lower production as a lever to force pork processors to share some of their profits.
“The group met virtually with Alberta Pork board directors and staff to advocate for reducing hog production, in response to pricing problems that producers continue to face,” the organization said in a news release.
“Alberta Pork agrees that this pricing issue needs to be resolved immediately.”
But while the farm group can advocate, it lost the power to act as a marketing agency 25 years ago and would need provincial approval to do so again. (Although at its last AGM in November, two-thirds of its members voted in favour of a resolution calling on Alberta Pork to explore that possibility.)
Since last summer, a “pricing committee” (made up of reps from the four pork boards in Western Canada) has been meeting periodically with Olymel, Maple Leaf Foods and Donald’s Fine Foods. It has urged all three to change their pricing formulas so the cut-out value (that is, the value of the pork) is reflected in the prices paid to producers. While some have offered temporary price rises and the market has improved somewhat, Alberta producers are still losing money on every hog they sell and have been for years, industry players say.
The situation is different in Quebec, where producers and processors use a pricing formula that reflects cut-out value. Producers have directed Alberta Pork to look at other hog-marketing options, including a system like Quebec’s.
“This exploration process is underway, and meetings have begun taking place with representatives from the provincial government,” the Alberta Pork release stated.
While the release did not say how many pigs the six producers raise or what size of production cuts they were contemplating, some sort of action is needed, the organization said.
“Alberta Pork will support producers wishing to make production reductions by bringing awareness of the initiative to others, including other producers, packers, and the media,” the release said. “However, it is necessary to acknowledge this approach only works for some farms. Not all farms are able to adopt such a strategy, as doing so could cost them their business.”
There are just over 300 commercial hog operators in the province who collectively have a herd of about 125,000 sows. Hutterite colonies and “producer groups” dominate with independents accounting for 17 per cent of production. In the last three years, 13 colonies and 19 independents have left the hog business.