The Rural Voice, 2004-11, Page 49PERTH folk
County Pork Producers NEWSLETTER
Pat Louwagie, President
519-393-6424
• The Rural Voice is provided to Perth
County Pork Producers by the PCPPA.
Is it time to look again at how we market Ontario hogs?
Any opinions expressed herein may
not necessarily reflect the views of
the Perth County Pork Producers'
Association.
I often wonder if direct contracting
has ever helped producers. Have we
really received greater value for our
hogs? Have we created more market
security'! Have we created a stable
processing industry because of direct
contracts? To the above questions I
would have to suggest no. Have the
processors been able to get a more
consistent hog or been able to
differentiate? Perhaps they have.
The producers of Ontario have
likely not received better market
access or market security because of
contracting. There seems to be a way
for processors to renege on their
contracts as they please. It is really
the availability of the Pool that has
created the security. Contracts are
ratcheting down on price while
narrowing weight and spec windows.
Who's negotiating? On the current
path, 1 believe it is inevitable
for processors to specify genetics
and feed (perhaps their own).
This would soon put them in control
of both the input and revenue side of
producers' business. This is indeed a
very weak position for producers to
be in. It has, and is, happening
elsewhere in this country and will
soon arrive here.
At the recent councillors meeting
held in Toronto, many comments
came to the floor. Several of these
were suggesting Ontario Pork get
back to selling all the hogs with no
more direct contracts. At first, it is
easy to pass this off as part of the past
or undoable. However, if there is a
collective will, it is quite doable, but 1
would suggest in a slightly different
way.
If Ontario Pork held all the hogs,
we as producers would be in a more
powerful position — for a short while.
We would only stay there if we
satisfied our customers. In a position
like that it becomes even more
important that we (Ontario Pork)
make sure our customer is as happy
as reasonably possible.
I consider the processor to be our
customer. The consumer, while
ultimately our customer, is not who is
buying from us. Our interest in the
consumer is to be sure we do our part
to make sure our customers
(processors) can satisfy their
customers (retailer and ultimately
consumer). We do this by providing
the processors with meat that meets
their specs.
I would expect that processors will
continue to demand differing and
evolving hogs based on size, meat
quantity specs. meat quality specs
and other criteria they need to
enhance their market. It is quite
doable for Ontario Pork to put out
different contracts (or pools) to
producers based on specifications to
fill specific needs of processors who
would negotiate deals with
Ontario Pork. There would be a
negotiation or formula to align price
with how demanding the pool is.
How the producer meets these
specs is up to the producer. As an
example, a redder meat requirement
could allow the producer the change
boar line or add a feed ingredient,
like barley, to achieve the right
colour. Some things like CQA®
could be automatically a part of every
contract.
Genetics. feed, management. and
byproducts all contribute to the meat
in a hog. By sticking with specs only.
it allows for good competition among
input suppliers to help a producer
achieve the required result at the
lowest price. This is quite different
from having brand -specific inputs
specified in a contract in that brand -
specific takes the cost control out of
the producers' hands. Hogs not
meeting specs could go into an off -
sort pool at a spot price and there
could even be a no spec (except for
size) pool if there is a market for
cheap hogs. or these could be the
same.
Farmer -owned (perhaps processor -
owned) production systems may need
some sort of a grandfather clause to
protect their investments. although
do believe they will work under this
as well.
In any case. we need to get more
power back into Ontario Pork's hands
(us). It is in our own best interest. We
have the most clout together. No size
of operation is big enough to go it
alone. Regardless of Ontario Pork's
direction. we as producers need to
back them. They have worked hard
for us. They are relevant and our best
option.0
— Submitted by Joe Kolkman
PERTH COUIITY PORN PRODUCERS'
PORI( PRODUCTS
• Smoked Pork Chops • Fresh Pork Chops
• Stuffed Loin Chops • Smoked Sausage
• Smoked Cheddar Sausage • Bacon Burgers
• Teriyaki Pork Steaks • Vittorio's BBQ Sauce
AVAILABLE FROM:
Steve Hulshof (Kinkora) 348-8167
Walter Bosch (Monkton) 356-9000
Ted Keller (Mitchell) 348-9836
NOVEMBER 2004 45