The Rural Voice, 2005-06, Page 37i
The environment will continue to
be an issue in the future.
Clark, says it's dangerous to
assume that the same forces that
Ontario
drove agriculture to where it
currently is will continue to drive
agriculture in the future.
While continuing the current the
trend would see fewer and larger
farms (Clark said she recently read
Ontario Ministry of Agriculture and
Food is considering reconfiguring
Pork Chair Larry Skinner looks ahead
Larry Skinner of Listowel, chair
of Ontario Pork, says one of
the continuing trends in pork
production will be development of
supply or value chain relationships
that bring a flow of information
about the product from the
producers through processors to
retailers and the consumer.
"Meeting the needs of the
consumers is out most important
goal," he says.
As a result, quality assurance
programs are likely to move from
optional to being mandatory for
producers. The programs are a seal
that the producer has completed
certain requirements that give a
measure of comfort and security to
the consumer. The pork quality
assurance program is shifting to
include a component of animal
welfare, for instance.
For producers serving the main
stream market through major
packers the characteristics of the
desired products may be more
precise.
But the value chain must begin to
reward farmers for achieving the
desired goals, he says. If farmers are
expected to spend money for higher
animal welfare standards or other
demands of the consumer chain,
then there must be some
compensation. So far there has been
no reward, either in terms of more
money or longer-term contracts.
Specialty markets will develop
into a more important segment of the
market, Skinner predicts, though
estimates vary as to whether this
might be 10 per cent or as high as 20
per cent. That may depend on the
income level of the consumer and
their ability to pay for what they
perceive as added value. If the
economy booms this is a market that
could grow more rapidly but it might
shrink in a recession, he says.
Skinner expects to continue to see
variety in production systems. The
growth of larger production units
and loops had its roots mostly in the
drive to improve the health of pigs
and thus their performance, rather
than demands of the value chain, he
says. To increase health, producers
looked at breaking down the
production chain, separating pigs at
farrowing, nursery and finishing
stages. To do this you needed bigger
numbers of similarly -aged pigs.
requiring bigger units.
But there has been a recognition
that farrow -to -finish operations still
work, Skinner says. There may be
synergies that producers with similar
genetic lines can achieve by working
together and there may be value in
alliances that farrow -to -finish
producers build with a processor but
time has proved that the small, self-
contained pork operation is still
viable.
In the last decade. for a young
farmer trying to get into the pork
industry, possession of a contract
has been a ticket for access to a
market and to financing. Financial
institutions saw the contract as a
security which made them more
ready to loan to a young farmer.
That security has proven illusory in
some cases with the failures of some
of the largest contractors in the
province and now financial
institutions are a little more skeptical
about putting too much confidence
in contracts.
Skinner thinks the reputatiolt of
the producer as someone who can
produce efficiently but also produce
pigs above the industry standards
will become more important.
There has been a heightened
awareness of the potential harm
from an outbreak of a foreign
disease. Skinner says. Having
witnessed the devastation in the beef
industry brought on by BSE and
being equally dependent on export
markets. the pork industry is
increasingly pushing for the
government and society to put
systems in place to manage the
impact of a disease outbreak.
One proposed solution is zoning
of the country with a division at the
Ontario -Manitoba border so that if
there's a disease outbreak in one part
of the country. the rest of the
country can continue international
trade. To make this work producers
must continue to expand traceability
and tracking programs to provide
integrity to the zoning program.
Canada Pork International
continues to try to reduce Canada's
vulnerability on the key markets of
the U.S. and Japan by seeking
diversity in exports. The irony is that
this push is coming at a time the
federal government has cut its
assistance to trade missions and
other trade assistance. Skinner says.
An industry round table has
identified potential markets in
Europe and Australia "but it's hard
to crack those markets without
government help." he says.
To compete internationally.
Ontario's producers must have
access to the latest technology and
the industry must continue to plow
dollars into research to continue this
country's leadership in the industry.
Skinner says. There will he new
challenges from countries not
recognized as major hog producers
today. The rivalry is most commonly
seen coming from Brazil but some
people think Ukraine has the
potential to he a major pork
production area.
While producers continue to
stock up in technology they must
also he conscious they don't
develop a high-cost production
system that hampers their ability to
compete on price. Skinner warns.
They also need to find the
equilibrium between producing
more and producing so much the
market declines.
The challenge for Canadian
producers is also coping with the
higher Canadian dollar that has
reduced the price farmers receive for
their production. So far the
appreciation of the dollar has been
buffered by the fact pork as been in
the high end of the price cycle.
When the cycle heads into the
bottom end. the resulting lower
prices will bring a period of
adjustment. Skinner predicts.)
JUNE 2005 33