HomeMy WebLinkAboutThe Citizen, 2008-01-31, Page 19The current crisis in porkproduction in Ontario goes beyondthe farm gate to threaten the existenceof not just farmers, but all the
businesses that sell to farmers and
process their products.
That was the view of Clare
Schlegel, Canadian Pork Council
president when he spoke to producers
at the annual meeting of the Huron
County Pork Producers Association in
Seaforth Jan. 23.
“Our producers must survive
because if we don’t, the rest of the
industry won’t exist,” Schlegel said.
The situation is so difficult that
producers like him are beginning to
wonder if supply and demand will
solve the problem this time, Schlegel
said. “We’ve heard that the best thing
for low prices is low prices. This time
around it feels different.”
On a world-wide basis there is not
an oversupply of pork to drive prices
down, he said. World pork demand
continues to grow at a rate of two per
cent per year.
But Ontario producers aren’t alone
in their pain. Australian producers are
hurting more than Ontario farmers.
European producers, even Brazilian
producers, are suffering. In Canada,
“I think Alberta is hurting more than
us,” he said.
“I have wondered if it is time to get
out,” Schlegel confessed. This is not a
normal low to the pork cycle as seen
in the past, he said. “Something has
changed here. The new factor is the
(high) Canadian dollar.”
The federal government has the
responsibility to provide stable
conditions under which efficient
producers can operate, Schlegel said.
Pork’s crisis is mirrored by those in
beef, in forestry and in the auto sector,
he pointed out.
“If we’re gone in five years it
doesn’t do much good if supply and
demand works.”
The competitive disadvantage of
the Ontario pork producer was
detailed by Steve Illick, representative
for Ontario Pork’s district 8, who had
done a comparison study between the
costs of producing in Ontario
compared to his production on farms
in the U.S.
“With my doing business on both
sides of the border it became evident
that there were a number of areas
where we’re not competitive,” Illick
said. “In the commodity world we
can’t afford to be on the wrong side of
the cost of production.”
Looking at everything from the
price of corn and soybeans for feed
rations to feed processing costs to
pharmaceuticals to transportation,
Illick calculated that it costs an
American producer $14 less to raise a
pig.
Even barn space was built in
Ontario at a time when the Canadian
dollar was low and it made sense to
build to take advantage of the U.S.
market, but now producers must paythe interest based on a high Canadiandollar that limits their ability toexport, Illick said.Labour costs are a major factor inCanada’s uncompetitiveness, he said.When the Canadian dollar was so
much lower than the U.S. dollar,
higher wages in Canada made sense,
but now the dollar is on par with the
U.S. and Canadian farm workers are
earning much more than their U.S.
counterparts.
“It’s going to be a challenge on how
to reduce labour costs,” Illick said.
As well, there are more regulations
to deal with in Canada, he said.
“We’re not on a level playing field.
We’ve set the bar too high.”
Canadian processors are being
challenged to keep their prices low by
the greater amount of pork coming
from the U.S., he said.
Schlegel also noted that while less
Canadian pork is going to the U.S.,
more American pork is making its
way to Canadian store shelves. It calls
for a redefinition of “Product of
Canada” labeling so consumers know
what they’re buying, he said.
But in questioning from the floor,
Illick agreed that the falling U.S.
dollar is causing inflationary
pressures for U.S. producers. For one
thing, the rising Canadian dollar has
shielded Canadians from the increase
in the price of petroleum. The
Americans have seen a 100 per cent
increase in gas compared to 50 per
cent here.
The cost of building per finishing
space has gone from $175 three or
four years ago to $230-$250 today, he
said.Speakers were united in their callfor the federal government to get onboard with more support.Phil Anwender, Perth County’sdirector and chair of Ontario Pork’ssafety net committee complained
there is a lack of leadership at the
federal level. He praised the Ontario
government for coming up with a
program to get cash to hard-hit pork,
beef and horticultural producers, but
said if the federal government would
pay its normal 60 per cent it would
help much more.
The Canadian Agricultural Income
Stabilization program (CAIS) just
won’t work for pork producers, he
said. Canadian pork producers are
going to lose $1 billion, he said.
Schlegel said existing federal
programs will help but not quickly
enough. He said agriculture minister
Gerry Ritz’s announcement in
December of “cash before Christmas”
through the Advance Payments
Program (APP), “was a cruel
punishment to put before farmers. It
put a ray of hope out there that was
off in the distance. I’m not very
hopeful right now that there will be
more help coming.”
Wilma Jeffrey, vice-chair of
Ontario Pork complained that her MP,
“still doesn’t get it”.
Huron County’s Ontario Pork
representative Teresa Van Raay said
there will be “a call to action” put out
to pork producer associations across
Canada in the next couple of weeks to
find enough producers willing to fly
to Calgary to Stephen Harper’s
constituency office.
Some in the crowd suggested that itwould make more sense to assemble alarge group of producers in Ottawabut Paul Steckle, MP for Huron-Bruce said that a protest would be a24-hour story at best. What seems towork, he said, is when someone has
the time to sit on someone’s doorstep
and becomes intrusive by not going
away. That works better than 200
tractors on Wellington Street, he said.
Jeffrey said that with a federal
election expected this year producers
need to “vote with a united voice for
those who supported us when we
needed it, not for what they promise.”Having been downbeat earlier inthe meeting, Schlegel did hold outhope toward the end. There is amassive liquidation in the porkindustry on both sides of the borderwhat will eventually reduce numbers
of pigs going to market, he said.
The winter is the worst time in the
pork market and things should
improve somewhat as spring
approaches.
“I think there is going to be a pig
industry in southwestern Ontario — I
really do,” he said.
THE CITIZEN, THURSDAY, JANUARY 31, 2008. PAGE 19. Schlegel says current crisis goes beyond farm gate
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