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The Rural Voice, 1991-12, Page 63PERTH rtk County Pork Producers NEWSLETTER Vince Hulshof, President R. R. 1, Sebringville, NOK 1X0 393-5586 The Rural Voice is provided to Perth County Pork Producers by the PCPPA REVIEW OF THE SELLING SYSTEM The information enclosed is a sum- mary of the preliminary report on the "review of the selling system." Re- gional meetings are scheduled this month to discuss these with the council- lors. It presents some opportunities for producers to seek out their own deals with packers, either individually or as a group, and be compensated for their efforts. Heavier, tighter weight ranges, genetics, timing of shipments, etc., are but a few of the items. Trucking of hogs should become more competitive and efficient. Gary Van Loon Summary of the Preliminary Report November 1991 A committee examining the way market hogs are sold in Ontario is rec- ommending some additions to the cur- rent selling system. After taking a close look at the major issues facing the indus- try, they are also recommending against some other possible changes. Formed by the Ontario Pork Producers Marketing Board, the committee is saying yes to three points and no to another three. Yes: • Allow producers and pack- ers to enter marketing agree- ments to satisfy market niches. • Update the present system for selling hogs; keep an auction for hogs, and the pooling of retums, and change point of ownership transfer. • Support the idea of having a long term slaughter industry in Ontario. Packers will be encouraged to pay equi- tably for hogs that will more closely meet their specifications. No: • Make changes to the board structure. This issue was not a part of the commit- tee's mandate. There are other mecha- nisms for handling this issue. • Start new kill and chill plant. On- tario already has excess slaughter ca- pacity. 60 THE RURAL VOICE • Contract custom kill and chill through arrangements between OPPMB and independent slaughterers. This option is less efficient than the systems already in place. The committee, comprised of pro- ducers, board members, and OPPMB staff, was formed following the March, 1991 annual meeting. Its tasks are to: 1. Examine and review all aspects of the hog marketing and distribution system. 2. Find ways of increasing the returns to Ontario hog producers. In arriving at their recommenda- tions, the committee studied nine main issues: producer returns, selling op- tions, pooling, commitment to Ontario packers, grading grid changes, kill and chill plants, countervail and tripartite stabilization for hogs, importing live U.S. hogs, and the board structure. The committee consulted with pro- ducers, packers, government, academ- ics, and other provincial boards. They and is for the OPPMB to investigate all opportunities to work with Ontario packers in developing pork markets in the U.S. The five recommendations for an improved marketing system include three options for selling hogs: direct producer -packer alliances, sorted pool, and standard pool. These recommenda- tions are supported by two others. The first is to continue with the current auc- tion system, as it is still the best price discovery system available. It is also an efficient system for allocating hogs among packers. The second is to change a condition of sale. The "F.O.B. selling point" should be changed from the as- sembly yard to the packing plant. Under this recommendation, a freight sur- charge is to be added to the cost of each load of hogs. The amount of surcharge would depend upon the location of the packing plant. The three selling options will pro- vide greater flexibility in the marketing system to meet the specific needs of packers. The direct producer -packer alliances will allow producers to make agreements with packers any- where in North America. The sorted pool will offer loads of hogs that have been sorted by the producer. The desired carcass weight range is 75 to 90 kilo- grams, and a new grading table will be prepared for these hogs. All hogs in this pool will be booked in by the producer and then sold by the board before the hogs are trucked from the farm. The standard pool will allow producers to market their hogs as they have always done. For all three options the OPPMB will maintain an active role in gathering and publishing market information. The committee's preliminary report is to be discussed with OPPMB council- lors at a series of regional meetings to be held during November. A final report will then be prepared for submission to the OPPMB on December 12. "A final report will be prepared for submission to the OPPMB on December 12." also held three public meetings and received 33 presentations from 10 county organizations, 21 individuals, and two industry groups. Seven recommendations are made by the committee for improving the marketing of hogs in Ontario. Two of them are related to the development of the U.S. markets for pork. The first is that a full investigation be conducted of the net benefits to producers of the Tri- partite Stabilization Program for hogs. It is possible that the burden of counter- vail duties on both pork and live hogs can be eliminated by the use of alternate forms of government support. The sec-