The Rural Voice, 1991-06, Page 128 THE RURAL VOICE
PORK PRODUCERS SHOULD
BEWARE OF FALSE PROPHETS
Adrian Vos, from Huron County, has
contributed to The Rural Voice since
its inception in 1975.
For some years now we have heard
pork producers discuss the subject of
"niche" markets. This came about be-
cause there are such niches for many
products, including meats. What is
not understood is the OPPMB does
not sell meat but live hogs, and the
niche market for live hogs is limited.
The niche that has drawn much
discussion at the annual meeting of the
pork board was for heavy hogs to the
U.S. On the face of it, this makes
much sense and therefore warrants a
closer look. Firstly, the average hog
weight in the U.S. has gone down and
ours has gone up. It is now not much
different from ours. Secondly, we
must compare the real price difference
between U.S. and Canadian prices.
In the week ending April 12, the
Ontario pool price was $147.20 per
100 kilogram (kg). Add the average
index of five per cent. The real price
the Ontario farmer receives, is then
$147.20 plus five per cent or $154.56
per 100 kg. The average weight is
80.63 kg, so the whole hog brought
$124.62 Canadian.
The American producer received,
on the same day, $50.75 U.S. per
hundred weight (cwt.) for grade 1 and
2, delivered at the packer's door. The
average comparable price, when the
lower grades are calculated into the
equatica, drops by two per cent. Our
packers pay the trucking cost from as-
sembly yard, averaging $2. The Ame-
rican packer pays F.O.B. the plant.
The American producer then gets
for the same weight of hog (225 lbs.)
$114.19 U.S. or, at the exchange rate
of the day, 5114.19 x .865, or $132.01
Canadian. Subtract two per cent for
the lower grades, $2.64 Canadian, and
S2 for trucking and the net price to the
U.S. farmer is $127.37 Canadian.
TheU.S. producer receives $2.75
Canadian more than the Ontarian.
For Ontario producers to ship hogs
to the U.S., whether within the board
or outside, will cost, in addition to the
regular price: countervail at $2.47;
NPPC check -off of $0.86; death loss,
shrink, brokerage fees etc., $1.75;
trucking from Stratford, $3.40, a total
of $8.48 per hog. This eats up the
$2,75 advantage for a loss of $5.73.
This confirms that the OPPMB
only sells to the highest bidder, for if
the American price, adjusted, is higher
than the Ontario price, more hogs go
to the U.S. Producers who would get
the privilege that the board sells their
hogs to the U.S. must accept that ALL
their hogs must go there ALL the
time, whether the U.S. price is higher
or lower, inclusive the low grades. If
a packer won't accept poor hogs, the
producer must truck these back to
dispose of as best he can.
There is also the endless talk about
the board slaughtering all hogs and
selling the carcasses to the packers
and to anyone else. Before a group of
farmers start a business venture, they
should first examine the history of
farmer businesses. FAME, a slaugh-
tering plant, was such a venture and
some of the smartest farmers worked
on it. It didn't even get off the ground
and some farmers, who believed in it
and invested in it, lost their life sav-
ings.
Another grim example is still going
on in Alberta. One arm of the Alberta
marketing board bought an existing
plant, Fletcher's. It was to fill a niche
market in the U.S., especially in Cali-
fornia, where all people are rich! It
has lost money ever since and may go
bankrupt any time.
An example even closer to home is
the failure of the "Pork Place" restau-
rant in Toronto. It couldn't go wrong.
What farmers failed to see was that it
was located in an office district where
people went home after work. The
restaurant drew a good crowd for noon
luncheons, but the lucrative evening
diners went elsewhere.0
MP Martin Mills Inc.
Lucknow Division
mortis
HOG — BROILER — LAYER
TURKEY — BEEF — DAIRY
VEAL — FISH — PET FOODS
S ioA—
-gb,Oa,m
�if�:r
— - ■• • 0 r/
noir
r/0
Electric Fence
Systeme
Announcement
Martin Mills Inc. are now
dealers for Speedrite
Fencing Systems
COMPLETE LINE
OF ANIMAL FEED AND
VETERINARY SUPPLIES
Martin Mills Inc.
Lucknow Division
Lucknow
519-528-3000
or
1-800-265-3006
8 THE RURAL VOICE
PORK PRODUCERS SHOULD
BEWARE OF FALSE PROPHETS
Adrian Vos, from Huron County, has
contributed to The Rural Voice since
its inception in 1975.
For some years now we have heard
pork producers discuss the subject of
"niche" markets. This came about be-
cause there are such niches for many
products, including meats. What is
not understood is the OPPMB does
not sell meat but live hogs, and the
niche market for live hogs is limited.
The niche that has drawn much
discussion at the annual meeting of the
pork board was for heavy hogs to the
U.S. On the face of it, this makes
much sense and therefore warrants a
closer look. Firstly, the average hog
weight in the U.S. has gone down and
ours has gone up. It is now not much
different from ours. Secondly, we
must compare the real price difference
between U.S. and Canadian prices.
In the week ending April 12, the
Ontario pool price was $147.20 per
100 kilogram (kg). Add the average
index of five per cent. The real price
the Ontario farmer receives, is then
$147.20 plus five per cent or $154.56
per 100 kg. The average weight is
80.63 kg, so the whole hog brought
$124.62 Canadian.
The American producer received,
on the same day, $50.75 U.S. per
hundred weight (cwt.) for grade 1 and
2, delivered at the packer's door. The
average comparable price, when the
lower grades are calculated into the
equatica, drops by two per cent. Our
packers pay the trucking cost from as-
sembly yard, averaging $2. The Ame-
rican packer pays F.O.B. the plant.
The American producer then gets
for the same weight of hog (225 lbs.)
$114.19 U.S. or, at the exchange rate
of the day, 5114.19 x .865, or $132.01
Canadian. Subtract two per cent for
the lower grades, $2.64 Canadian, and
S2 for trucking and the net price to the
U.S. farmer is $127.37 Canadian.
TheU.S. producer receives $2.75
Canadian more than the Ontarian.
For Ontario producers to ship hogs
to the U.S., whether within the board
or outside, will cost, in addition to the
regular price: countervail at $2.47;
NPPC check -off of $0.86; death loss,
shrink, brokerage fees etc., $1.75;
trucking from Stratford, $3.40, a total
of $8.48 per hog. This eats up the
$2,75 advantage for a loss of $5.73.
This confirms that the OPPMB
only sells to the highest bidder, for if
the American price, adjusted, is higher
than the Ontario price, more hogs go
to the U.S. Producers who would get
the privilege that the board sells their
hogs to the U.S. must accept that ALL
their hogs must go there ALL the
time, whether the U.S. price is higher
or lower, inclusive the low grades. If
a packer won't accept poor hogs, the
producer must truck these back to
dispose of as best he can.
There is also the endless talk about
the board slaughtering all hogs and
selling the carcasses to the packers
and to anyone else. Before a group of
farmers start a business venture, they
should first examine the history of
farmer businesses. FAME, a slaugh-
tering plant, was such a venture and
some of the smartest farmers worked
on it. It didn't even get off the ground
and some farmers, who believed in it
and invested in it, lost their life sav-
ings.
Another grim example is still going
on in Alberta. One arm of the Alberta
marketing board bought an existing
plant, Fletcher's. It was to fill a niche
market in the U.S., especially in Cali-
fornia, where all people are rich! It
has lost money ever since and may go
bankrupt any time.
An example even closer to home is
the failure of the "Pork Place" restau-
rant in Toronto. It couldn't go wrong.
What farmers failed to see was that it
was located in an office district where
people went home after work. The
restaurant drew a good crowd for noon
luncheons, but the lucrative evening
diners went elsewhere.0