The Rural Voice, 2001-06, Page 24This little piggy needs a market
Ever since the 1998 market crash when too many pigs chased too little
processing capacity, access to a share of the marketplace has been a
growing concern to some non -contract hog producers
By Keith Roulston
Qn
April 26 Progressive Pork
{'reducers Co-operative Inc.
announced it had reached
agreement with Conestoga Meat
Packers of Breslau to purchase the
company and process members'
hogs.
Late last fall Acre T Farms of
Brussels announced partnership with
Larry and Glenn Tulpin of Norfolk
Packers in St. Williams to form
Oxford Packers. Currently approvals
are be being sought to build a 5,000 -
head per week kill and chill plant in
Mitchell, 50 per cent of the capacity
of which will come from Acre T.
Is vertical integration now moving
to a bottom-up phase? Will farmers
have to "buy" shackle space in the
future if they want to be guaranteed a
market for their pigs? The answer
seems to be no — for now, but who
knows in the future?
Certainly there are concerns south
of the border where huge integrated
companies control hogs from the
farm right through to wholesale
distribution. When he spoke at a
forum on competitiveness in
20 THE RURAL VOICE
With more and more hogs sold under contra' t to packers, should
independent hog producers be concerned about their future markets? Some
are, and they're doing something about it.
Shakespeare in December 1999,
Wayne Snyder a buyer for Farmland
Industries Inc., a large producer -
owned pork processing co-op in the
U.S. midwest, said the key for a farm
to be competitive is to have access to
a market.
its no longer good enough to be a
low cost producer, Snyder said. He
told of turkey producers he knew of
who were low cost producers but
when the packing plant that bought
their turkeys closed, they were left
without a market.
In pork, the contraction of the
open marketplace has come from
vertical integration of an industry
where packers answer the demands
of consumers by trying to create a
consistent product. In the U.S. it has
led to companies like Tyson Foods
Inc. and Smithfield Foods that
control pigs from choosing the
genetics to providing the feed to a
consistent production formula to
slaughtering and processing. In
Canada the packers haven't followed
the American example by getting
into production of hogs but
companies like Maple Leaf Foods
now fill the major part of their
capacity with pigs contracted directly
from producers. The old single desk
system run by Ontario Pork, once the
trading centre for all pigs on Ontario
is long gone. Ontario Pork has
become "irrelevant", one disgruntled
producer said.
When Bob Hunsberger, vice-
president of Progressive Pork
Producers (PPP) first got involved in
trying to form the co-operative eight
long years ago, the idea was to create
an additional market for Ontario
hogs. At that point the co-op hoped
to build a large kill and chill plant in
London. Over the years that plan has
evolved and the Conestoga purchase
moves the company in another
direction, adopting a "gate -to -plate"
strategy of vertical integration from
the farm to the wholesale level,